Transportation Conference Committee Report Completed

The measure, which may be vetoed as soon as May 15, relies on general fund shifts and borrowing, and fails to adequately fund city streets and regional transit.
(Published May 15, 2017)

The transportation funding conference committee has ironed out differences between the House and Senate bills (SF 1060/HF 861) and sent a conference committee report to the floors of both bodies.

A conference committee report is what the committee refers to the full House and Senate for a final vote before sending a compromise bill to Gov. Dayton. The measure passed off the House floor on May 10 on a vote of 75-56. It is awaiting final action by the Senate before heading for Gov. Dayton’s desk for consideration. The governor may receive the bill as early as May 15, and he is expected to veto it.

The agreement
The agreement is focused on infusing new funds into the Highway User Tax Distribution Fund (HUDTF), the account used to fund roads and bridges. It transfers about $328 million in auto parts tax revenues out of the general fund and into the HUDTF over the next two years. This is lower than the $450 million originally proposed in the House omnibus transportation bill, and the $400 million that was proposed in the Senate version.

The measure also relies on substantial borrowing, proposing $600 million in bonding. It proposes that $300 million be dedicated to the Corridors of Commerce program and another $300 million for state road construction.

Short on city street and regional transit funding
While the agreement does provide new revenue for roads and bridges funded with the HUDTF, it does not include the League’s proposal to enact license tab fee and motor vehicle title transfer surcharges to fund city streets in large and small cities.

The current conference committee report restores some of the cuts made to Metropolitan Transit in an earlier version of the bill. However, transit advocates maintain the funding level for transit in the agreement is inadequate.

League position on record
Last month, the League provided testimony before the conference committee, saying the League supports omnibus transportation funding that is comprehensive, multimodal, and sustainable. The League also raised concerns that neither the House nor the Senate bill provides enough revenue to assist cities with non-municipal state aid city streets. The League provided a letter for the record that more fully articulates the concerns of cities.

With few exceptions, other testifiers expressed disappointment with the bills, saying neither adequately addresses Minnesota’s growing transportation needs.

The League also signed a joint letter to Gov. Dayton encouraging him to demand a long-term comprehensive transportation funding package containing increased constitutionally dedicated money and funds from the sales tax on auto parts.

Next steps
The governor has made public statements that he may be willing to sign a bill that dedicates revenues from motor vehicle parts to provide new funding for roads and bridges. This is a major shift from his longstanding position demanding a gas tax increase. The bill, as it emerged from conference committee, still falls short of many of the governor’s demands, and he is expected to veto it as soon as May 15. Conferees and legislative leaders will be forced to rework the bill in order to reach a compromise with Gov. Dayton.

For more background information about the omnibus transportation finance bills, read a previous Bulletin article.

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