From the office of the chairman of the state legislature's transportation conference committee:

On a bipartisan 47-17 vote, the Minnesota Senate passed the funding compromise that was adopted by the Transportation Conference Committee, announced state Sen. Steve Murphy, DFL-Red Wing, the Senate chairman of the committee.

"The conference committee took legislators’ concerns into consideration and assembled a funding package that we believed could gain bipartisan support," said Murphy. "We’re serious about moving Minnesota forward this session, and in order to do so, we needed to make some concessions from our original proposals. The bill that came out of conference is a fair and sensible solution to our transportation funding crisis, and reflects a great deal of compromise."

The funding package includes a 5-cent increase in the gas tax.

Both the Senate and House had originally passed a 10-cent increase.

"There are a lot of members who said they could support a nickel, but not a dime," said Murphy. "While we know 5 cents can’t accomplish everything we originally envisioned, it’s still a healthy investment in our transportation infrastructure. By putting real money into the system, we’ll finally be able to restore Minnesota’s pay-as-you-go tradition and move away from our addiction to debt to meet our transportation needs."

Additionally, the bill allows counties within the metropolitan area, by board resolution, to form a joint powers agreement and levy a half-cent sales tax for transportation funding.

"The half-cent sales tax will provide the metropolitan area with a needed boost in transit funding," said Murphy. "Cities all over the country have invested in transportation through local-option sales taxes, and as a result, have developed integrated transit networks. The Twin Cities needs to catch up with these regions so we too can reap the economic development benefits they have realized."

Murphy noted the precedent set by the passage of the Hennepin County sales tax last year.

"If we can allow a county to levy a sales tax to build a baseball stadium for 25 millionaires, we should certainly allow the metropolitan area the option to invest in over a million transit riders," said Murphy.

Counties in greater Minnesota could also levy a half-cent sales tax for transportation funding, subject to voter approval. Revenues collected under the Motor Vehicle Sales Tax and leased vehicle sales tax are allocated to transportation purposes. Metropolitan counties are allowed to levy a wheelage tax of $5 or $10 per vehicle. The levy offset requirement is removed.

The legislation also removes the caps on vehicle registration that were put in place during the Ventura administration. Vehicle depreciation is accelerated, which will result in a savings for most vehicle owners.

"Unlike the governor’s borrowing proposal, which relies almost exclusively on trunk highway bonding, the Senate has passed a comprehensive funding package that balances the needs of our highways, local roads, and transit systems," said Murphy.

The bonding program authorized in the conference report is supported by a surcharge on the gas tax, capped at 2.5 cents. The surcharge will be used towards the debt service on the bonds.

"By providing real funding to pay some of the debt service, the Legislature is taking the fiscally responsible approach to bonding and reducing the debt burden on future generations," said Murphy. "We’re recognizing that bonds cost real money."

With the passage of the conference report by the House of Representatives earlier in the day, the bill is now headed to the governor. Murphy commented on the governor’s promise to veto this legislation.

"Minnesota has over $1.8 billion in unmet transportation needs each year," said Murphy. "If we ever want to catch up and address these needs, we need to put real money into the system. We can’t just keep relying on the state’s credit card to pay the bills. Failing to make a real investment now will only cause our needs to grow and the state to fall further behind. If he’s serious about providing a solution to the state’s transportation problems, the governor should recognize our gigantic effort to compromise and meet us halfway by signing this bill into law."