Walz Administration Framing Gas Tax Increase as ‘Debt Service Fee’

Minnesota Department of Transportation Commissioner Margaret Anderson-Kelliher is pushing a combined gas-tax increase along with what she’s calling a “debt-service fee” that would raise fuel prices by up to 15 cents per gallon, according to interviews with local news outlets.

Anderson-Kelliher did back-to-back interviews with the Rochester Post-Bulletin and the Mankato Free Press in September to promote the idea. Minnesota’s DFL Party began “actively exploring” the debt-service fee in July, which would increase gas prices to help cover the costs of borrowing money for highway improvements.

“The idea of increased trunk highway bonding, which has been a Republican approach, and putting that together with a debt-service surcharge, which is a responsible Democratic, pay-as-you-go approach, may be a way for us to get over this gas tax hurdle,” House Speaker Melissa Hortman (DFL-Brooklyn Park) said of the idea.

State Sen. John Jasinski (R-Faribault), vice-chair of the Senate Transportation and Finance Policy Committee, said the debt-service fee is “still a gas tax, and people are saying they don’t want a gas tax increase.”

Mankato Free Press endorsed the idea after sitting down with Commissioner Anderson-Kelliher on September 18, saying the “idea has merit” and “could be a place to start.”

“It does involve expanding the gas tax but takes a different approach that worked the last time the gas tax was raised in 2008,” the outlet writes. “That was the last time Democrats and Republicans agreed to raise the gas tax with an override of Gov. Tim Pawlenty’s veto. It may be almost taking a plan from Pawlenty’s playbook in a framing of the issue as a ‘fee’ instead of a tax.”

The Bemidji Pioneer notes that a debt-service fee was passed in 2008 to help “pay off bonds issued to repair or replace the state’s deteriorating bridges after the 2007 collapse” of the I-35W bridge. Anderson-Kelliher was Minnesota House speaker at the time.

In her interview with the Rochester Post Bulletin, Anderson-Kelliher said the state “should start anew and look at ways we can build from there.”

“There is a real need in this community to address not only the transportation movement of cars and transit, but people want to bike safely and they want to walk safely. And to be able to do that, you actually need more resources,” she said.

The Center of the American Experiment’s Tom Steward thinks this means Anderson-Kelliher plans to use “the increased bonding capacity as a backdoor way of building bike paths and diverting billions of tax dollars to green alternatives to the automobile.”

Steward called the idea of framing a gas-tax increase as a fee a “bait-and-switch.”

Gov. Tim Walz ran a platform of increasing the state’s gas tax and has been pushing for an increase ever since he took office, but the Republican-controlled Senate defeated the measure during the most recent legislative session.

Gov. Walz continues to push a gas tax increase and said during a June interview that he expects Republicans to get on board during the next session.

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Anthony Gockowski is managing editor of Battleground State News, The Ohio Star, and The Minnesota Sun. Follow Anthony on Twitter. Email tips to [email protected].
Photo “Tom Walz” by Jonathunder GFDL1.2