Tuesday, March 17, 2015

Gas Pains

Infrastructure spending is now the last refuge of a scoundrel.

Big spenders from Iowa to Texas to New Jersey to Michigan are proposing whopping increases in gas taxes all in the name of infrastructure. Here in Minnesota Gov. Mark Dayton naturally wants another new tax--this time adding a 6.5% gas tax at the wholesale level, along with license fee increases and a new metro-wide sales tax for, you guessed it, mass transit.

But when it comes to transportation here and in Washington, a lack of government revenue isn't what plagues our roads. About 25% of the current federal gas tax of 18.4 (not including diesel) cents per gallon is siphoned off for non-highway uses, primarily via the Mass Transit Account. As a result, the HTF must now rely on general fund bailouts to survive.

Recent history here in Minnesota also proves a similar point. In 2006, voters bought a bill of goods known as the "Vote Yes" transportation amendment ostensibly aimed at dedicating the motor vehicle excise taxes for roads. By the time transit interests got done with it, 40 percent of its revenue was being redirected for things like the Central Corridor light-rail project.

Then in 2008 a $6.6 billion multiyear state license, gas and sales tax passed with the false assurances this would make the Minnesota Highway Trunk Fund Solvent for years to come. In fact, the last portion of this gas tax phase in just kicked in two years ago giving the North Star state a 28.5 cent per gallon levy.

Minnesota already spends far more per capita on roads than the national average and it doesn't help matters that only 40% of the Highway User Tax Distribution Fund is allocated to the Mpls-St. Paul area, home to 60% of the state population. If allocation were based on vehicle lane miles traveled there would be much less congestion in and around the metro area. But this latest tax grab has much less to do with transportation than it does with DFL pork barreling for their own special out state interests.

Indeed, Minnesota has been hit with a blizzard of taxes recently. 2008's Legacy Amendment turned out to be nothing more than an $11 billion sales tax slush fund for a secretive group of insiders known as the Lessard-Sams Outdoor Heritage Council. Yet none of this was enough for Governor Mark Dayton's insatiable appetite for other people's money. Recall it was Mr. Dayton, who rammed through a massive income tax hike giving the 'land of 10,000 taxes' the 4th highest individual income tax rate in the nation, according to the Tax Foundation. In 2011, state and local income tax collections were $1,404 per person in Minnesota, which ranked 6th highest nationally.

Now, even in face of a $1.87 billion state budget surplus, the most irresponsible Governor in the country wants to add 16 cents a gallon to the government's coffers. And that, my friends, is why we're fighting back in Minnesota at galt.io/missions/nogastax/. Please join us today.

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