Legislature overrides veto of transportation funding bill
A long-awaited funding increase for roads, bridges, and transit in Minnesota became reality on Feb. 25 when the Legislature voted to override Gov. Pawlenty's veto of the 2008 omnibus transportation funding bill.
The bill, HF 2800 (sponsored by Bernard Lieder, DFL-Crookston), landed on the governor's desk on Feb. 21, and it was vetoed the next day. The bill was signed into law by House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, and Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, on Feb. 25.
What the new law will do
The following are key funding provisions that will go into effect:
- A 5-cent increase in the gas tax (2 cents beginning April 1, 2008, and another 3 cents beginning October 1, 2008)
- Authorization for up to 3.5 cents in a surcharge on the gas tax to pay for trunk highway bond debt
- $1.8 billion in trunk highway bonds over 10 years
- Elimination of caps on license tab fees and changes to the depreciation schedule
- Dedication of the sales tax on leased vehicles to Greater Minnesota transit and local roads starting in fiscal year (FY) 2010
- A $25 tax credit for low-income residents
- Authorization for metropolitan area counties to impose a 0.25 percent sales tax for transit
- Authorization for counties in Greater Minnesota to levy a sales tax of up to 0.5 percent for transportation purposes
- Increased authorization for the Minnesota Department of Transportation (MnDOT) to spend trunk highway funds in FY08 and FY09 to reflect federal emergency funding related to the I-35W bridge project
- $60M in general obligation bonds for local roads and local bridges
Background on the new law
Prospects for a veto override had been uncertain. In 2005, led by a Republican majority in the House, the Legislature passed a similar bill that was vetoed by Gov. Pawlenty. They did not attempt to override the governor's veto. Again in 2007, the Legislature passed a comprehensive transportation funding package. It was vetoed, and a veto-override attempt failed in the waning hours of session.
A veto override requires 90 votes in the 134-member House and 45 votes in the 67-member Senate. Initial passage of the 2008 omnibus transportation funding bill fell one vote short of the necessary veto-override number in the House. On Feb. 25, 2008, the veto override succeeded on a vote of 91 to 41 in the House and 47 to 20 in the Senate. It was the first time the Minnesota Legislature has overridden a veto from Gov. Pawlenty.
Prior to sending the bill to the governor's desk, the bill had been scaled back from $8.4 billion to $6.6 billion over 10 years in an effort to secure additional votes. The authors eliminated the inflationary index provision and reduced the sales tax authorization in the Twin Cities metropolitan area from 0.5 percent to 0.25 percent. All of the revenue raised by the 0.25 percent sales tax is dedicated to transit. In order to provide some additional funding for roads in the metropolitan area, the bill shifts distribution of the 5 percent that comes off the top of the Highway User Tax Distribution Fund prior to the 62 percent/29 percent/9 percent distribution formula contained in the Minnesota Constitution. This section was further amended to ensure that a portion of the revenue is dedicated to roads in the metropolitan area.
The bill was also amended to restrict the metropolitan area sales tax to the seven metropolitan counties, excluding adjacent counties that had previously been allowed to opt-in to the joint powers board.
The new law is supported by a wide range of stakeholders, including the Minnesota Chamber of Commerce, labor groups, local government associations including the League, and several agricultural interests.
For more information
Contact Anne Finn, LMC, at (651) 281-1263 or afinn@lmc.org.
