Minnesota Senate leaders released a comprehensive transportation funding plan January 12 to generate more than $800 million in new recurring revenue and $1.567 billion in bonds for the state’s transportation infrastructure.

The Senate proposal includes:

  • A 6.5 percent sales tax on motor fuel purchases, in addition to the state’s current 28.5 cents-per-gallon motor fuel tax, which would generate an estimated $580 million annually;
  • A floor in place on the motor fuels sales tax to prevent the sales tax from generating less than 10 cents-per-gallon;
  • A one cent general sales tax in the seven-county metropolitan region (new in two counties, increasing by ¾ of a cent in five counties), producing an estimated $251.3 million in revenue dedicated primarily to transit development, with $40 million annually reserved for bicycle and pedestrian projects;
  • An increase in annual vehicle registration fees for $125 million in funding for roads and bridges;
  • A motor vehicle lease tax to fund transit;
  • $200 million per year for four years in trunk highway bonds to be used for the state’s Corridors of Commerce program;
  • An additional $200 million in trunk highway bonds (dispersed over four years) for transportation economic development;
  • $567 million in General Obligation (GO) bonds for local roads bridges; and
  • The implementation of a public-private partnership pilot program.

If approved, an estimated $800 million would be generated in 2016. As the taxes are implemented, recurring revenue from the Senate’s plan is estimated to increase to $1.09 billion in 2017, $1.109 billion in 2018 and $1.125 billion in 2019.

House Republicans released a different proposal January 8 that would utilize a projected budget surplus, funds from reserves, and Minnesota Department of Transportation efficiencies to provide $750 million in road maintenance over the next four years.