February 18, 2008

Transportation at the Minnesota Legislature

As expected, the transportation situation in Minnesota is at the forefront of the state Legislature.

The DFL has already introduced a major transportation spending bill similar to last year's...several billion dollars worth. Unfortunately for them, many Republicans are aghast at the large number of 'tax increases' contained in the bill, and the Governor has already put out that he will oppose any tax increases that do not include a corresponding 'tax decrease' elsewhere.

With the state facing a budget deficit, I doubt that'll happen. Unless some major compromise occurs, it'll probably come down to a situation similar to last year: Governor vetoes a transportation bill, the Senate overrides, but the House sustains the veto.

I'm on the mailing list for one state Senator (who shall remain nameless here). The following is part of a legislative update this Senator E-mailed out today:


The $8.4 billion transportation plan introduced last week is very
similar to the bill vetoed by Gov. Pawlenty last spring. It includes a
new 5-cent gas tax with inflationary increases, as much as a 2-1/2 cent
fuel surcharge, a new car registration tax and a half-cent metro sales
tax for transit which is not subject to voter approval.

The bill would undoubtedly provide a large infusion of needed funding
for congested roads and ailing bridges across the state, as well as
funding new state patrol officers and giving transit users more options.
Unfortunately, the bill relies too heavily on new taxes and fees that
would cost all of us directly and indirectly by adding to the cost of
goods brought to market. An additional provision borrows $2.2 billion
for bonding over 10 years. Although the governor has promised a veto of
any bill that does not have a corresponding tax cut, a veto override
attempt could be close.

The House and Senate bills both have a few more committee hearings
before being brought to the respective floors for full debate. At those
stops, it is possible that significant changes will be made, so I will
try to keep you updated on this important bill's status.


Following is my reply:

We're not going to improve the transportation situation by bonding alone, contrary to what the Governor may think. And given the budget deficit that you've already cited, we can't exactly pull money out of the general fund either.

Some sort of revenue increase will be needed. If it takes the DFL and enough Republicans to compromise on a transportation bill that would be veto-proof, then so be it. I'd rather have something than nothing. And if the Legislature ends this session with nothing, you and the Governor will have a lot of angry voters to contend with.

A lot of people are complaining that the tax increases for transportation proposed would "hurt the working poor". Do any of them (yourself included) realize that the working poor are hurt just as much, if not more, by traffic congestion in the metro, poor roadways, and poor transit service? Sure, nobody likes paying more to drive or travel, but if the result is a better transportation system, one that saves TIME as well as the hidden monetary costs of congestion, then it will be worth it.

But the gas tax is still part and parcel of it. Already has Constitutional protection, and is more a "user fee" than most people think.

Nevermind that history shows infrastructure improvements to be economic builders as
well...an important thing to remember in this near-recession economic time.

Lastly, on the subject of tax reform and transportation, it's been long established by the scientific community that heavier vehicles both A) damage roads more than lighter vehicles, and B) require much heavier road construction for the road to support them. Given those in mind, perhaps the state should change vehicle registration fees to be based on vehicle weight instead of based on market value/age depreciation.


Will be interesting to see what happens. Hopefully Minnesotans won't be disappointed in the end.

February 17, 2008

A *REAL* economic stimulus package

So Congress, worried about the economy, passes a $168 billion "economic stimulus package" that the President signs, giving tax breaks to businesses and rebates to taxpayers in an effort to stimulate spending and conversely the now-faltering economy.

Perhaps if Congress had done their homework, they'd have realized that there are far better areas they could have put that money that would do much more to jump-start the economy. With history to back it up.

Tax breaks to some businesses, especially small businesses (which are the lifeblood of the economy to begin with) may be beneficial. And while every taxpayer enjoys getting money back from the government, polls are already showing that a vast majority will be using the rebates to pay down debt or put into savings, instead of spending it as Congress intended. Sorry, Congress/Mr. President, but a much better location to target that $168 billion would have been infrastructure.

Take a look around you. Our public infrastructure is crumbling. Electric grids are overloaded. Water and sewage facilities are old and in need of replacement, as is thousands upon thousands of bridges and miles of pavement. People are sitting in traffic congestion due to lack of capacity and lack of other options.

Even using just 1/3 of that $168 billion figure for infrastructure would have given astounding results. History has long shown that investment in public infrastructure pays hefty dividends down the road (pun intended). Not only would it create construction jobs (with several ancillary economic benefits as a result), but investing in the transportation infrastructure would give motorists and travelers time and money benefits....less time on the road (meaning more time with family), less gas wasted (meaning less money spent on gas...money that they can then spend elsewhere), and better ability to move goods and services (meaning money savings for businesses).

It's a win-win situation. And it's completely UNSAT that Congress failed to consider it.