here for PDF format
of Meeting with Ron Erhardt
8301 Creekside Circle, Bloomington,
Friday, June 16, 2006
speaker: State Rep. Ron Erhardt,
chair, House Transportation Policy Committee
Verne Johnson, chair; Chuck Clay, Paul Gilje, Jim Hetland (by phone), Jim
Olson (by phone), and Wayne Popham (by phone)
A. Welcome and introduction--Verne
welcomed Ron Erhardt to the Caucus. Verne explained that about 160
persons will be receiving summaries of this meeting, even though only a
few persons are physically at the meeting. Erhardt will be given the
opportunity to review and make changes in the summary before it is
distributed. Paul introduced Erhardt, a 16-year veteran of the Minnesota
House. He's been a financial planner for 34 years and has lived in
Edina for 36 years. He's a member of several civic organizations,
including the Citizens League, the Edina Chamber of Commerce, and Ducks
Unlimited. He was given the 2006 Conservation leadership award from the
League of Conservation Voters. In Erhardt's comments and in the
discussion the following points were made:
1. Scope of vetoed bill with
constitutional amendment --Erhardt noted that the 2005 bill
containing the constitutional amendment for dedicating the motor vehicle
sales tax (MVST) to transit and highways was part of an omnibus funding
bill. The omnibus bill was vetoed by the governor, but the amendment
stayed in effect because a governor's veto doesn't apply to submitting a
constitutional amendment to the voters.
Erhardt then summarized the other major funding parts of the
--an increase of 10 cents a gallon (in two five-cent
increments) on motor fuel taxes,
--an increase in vehicle license taxes,
--dedicated revenue from 1/4 percent of sales tax collected
in the metropolitan area to transit,
--increasing the authority of counties to levy
wheelage taxes from $5 to $20 a vehicle and removing a requirement that
county property tax levies be reduced accordingly,
--authorizing trunk highway bonds for 10 years at
$100 million a year.
The bill passed with support of 10 Republicans and 62 DFLers
in the House. There was an expectation that the bill would end up in a
conference committee to clear up some concerns over language, but the
Senate accepted the bill without changes. Then the Governor vetoed the
bill because it contained tax increases, which the Governor had pledged to
Erhardt said the bill was designed to balance three urgent
needs: (1) safety improvements for rural roads and strengthening weight
capabilities of farm-to-market roads, (2) transit for inner cities and
close in suburbs, and (3) highways to eliminate suburban bottlenecks.
In 2006 the Governor proposed a $2.5 billion bonding program,
with the bonds not being sold unless the MVST amendment passed. But that
bill didn't get through the Legislature.
2. Provisions of constitutional
amendment explained --The amendment, to be voted on in November
2006, requires a majority of all persons voting at the election to be
adopted The amendment dedicates all MVST funds to transit and highways.
Under the language of the amendment transit is guaranteed at least 40
percent of the funds. The Legislature would determine how the other 60
percent will be apportioned between transit and highways. Amounts for
highways would be deposited in the constitutionally-established highway
user tax distribution fund and distributed according to provisions of
constitution: 62 percent to state highways; 29 percent to county
highways, and 9 percent to municipal highways.
3. Unsuccessful efforts to
change language of the amendment --Focus groups have revealed
that prospects for success would be enhanced if 60 percent were guaranteed
for highways, Erhardt said. Erhardt said he personally supports such a
guarantee. However, efforts to make changes in the language during the
2006 Legislature were unsuccessful.
4. Urgent need for
transportation funding --To illustrate the need for
transportation funding, Erhardt distributed a forecast issued December 6,
2004, outlining combined needs for additional funds of $1.7 billion
annually for the next quarter century for state, county, and municipal
highways, transit, airports, ports and waterways. Of that $1.7 billion,
slightly more than $1 billion would be needed annually for state trunk
highways, and about $300 million annually for transit.
Even if the amendment is adopted, needs will be greater than
can be funded by the amendment alone, he said.
To illustrate the urgency for funds, Erhardt said MnDOT is
resorting to asking contractors to submit bids that include lending money
to the state.
If needs are so great, a member said, it is puzzling why the
Legislature has such a difficult time responding in conventional fashion,
rather than via a constitutional amendment.
5. Adjusting for drop in vehicle
license fees --Erhardt discussed the connection between
dedicating MVST funds for transportation and a reduction in vehicle
license fees during the
Ventura administration. To offset a reduction in vehicle license fees
that was advocated by Ventura, the Legislature decided to dedicate--by
law--slightly more than one-half of the MVST funds. The proposed
constitutional amendment would permanently dedicate all MVST funds for
transit and highways.
6. Unusual opposition to the
amendment --Some greater
(non-metro) residents are opposed to the amendment because of its
guarantee of at least 40 percent for transit. Unfortunately, many persons
in that part of the state aren't yet aware of their transit needs. Some
places are aware, he said, including St. Cloud, Duluth and Rochester.
7. Necessity for a
constitutional amendment --Erhardt was asked why a
constitutional amendment is being proposed since the Legislature could
dedicate the same funds by law for transit and highways. Erhardt replied
that the constitutional amendment was proposed by the Governor. As a
principle, Erhardt said he doesn't support dedicating funds in the
constitution and that he'd oppose an amendment for outdoors, for example.
But in light of the Governor's action and in light of the fact that
gasoline taxes and license fees already are dedicated, the MVST dedication
doesn't seem to be a departure from principle. A Civic Caucus member
said that if MVST passes, we'll see a host of additional functions seeking
constitutional protection, too.
8. Seeking other commentary
--Asked who else we might visit with, in addition to persons already heard
from and scheduled, Erhardt said that someone from the rural areas might
be helpful. It was noted that the League of Small Cities might be a good
place to turn. He also suggested the Transportation Alliance and its
legislative director Margaret Donahoe.
9. Question of long-term
stability --Noting that the Legislature could change the MVST
allocation to highways every year, a member inquired whether the MVST
amendment really provides the long-term revenue stability that the state
trunk highway interests are seeking. During this discussion Verne
clarified that the Civic Caucus is on record in favor of an increase in
the state gasoline tax, which would provide the need stability.
10. Consequences of voter rejection
--The question was raised but not answered as to what would happen in the
2007 Legislature if voters reject the amendment this fall. Will the
Legislature be more reluctant to pass a tax increase for transportation?
The Legislature could, of course, pass a MVST dedication by statute.
11. Transit decisions needing to
be made --If the amendment passes, then the Legislature would
need to determine the exact distribution between transit and highways and
also decide how to distribute the transit funds. He said one plan is
that--of the 40 percent is given to transit--36 percent would go to metro
area and 4 percent to the rest of the state. Asked about the definition
of "transit", Erhardt said he thinks that such improvements as
park-and-ride lots would fall under the transit definition.
12. Five-year phase-in
--In response to a question, Erhardt said that if the amendment passes,
full dedication of MVST would be phased in over five years.
--Verne thanked Erhardt for meeting with us today.
The Civic Caucus
is a non-partisan,
tax-exempt educational organization. Core participants
include persons of varying political persuasions, reflecting
years of leadership in politics and business.
A working group meets face-to-face to
provide leadership. They are Verne C. Johnson, chair; Lee
Canning, Charles Clay, Bill Frenzel,
Paul Gilje, Jim Hetland,
John Mooty, Jim Olson, Wayne Popham and John Rollwagen.