CONSTITUTIONAL BALLOT QUESTION ON TRANSPORTATION

"BLOG"

10/13/2006

by MN Senator Sheila Kiscaden
October 13, 2006

I thought it might be helpful to you to have some background information about the constitutional amendment which the Legislature voted to put on the ballot this November. This amendment is all that remained of a comprehensive transportation bill that passed the House and Senate with bipartisan support, but which was vetoed by Governor Pawlenty.  This portion of the bill survived because governors cannot veto constitutional amendments.

About two weeks ago the Coffee and Conversation group sponsored a forum to discuss the proposed constitutional amendment to constitutionally dedicate the Motor Vehicle Sales Tax to highways (60%) and transit (40%).  Many people are not aware that the question will be on the ballot on November 7th.  The forum was intended to raise public awareness and encourage citizen discussion and debate about the amendment.

At the Coffee and Conversation Forum, a summary of the proposal and the arguments made in favor of or in opposition to the amendment was distributed.  I thought it might be helpful to you to have that handout for your own review as you decide whether or not to support the proposed amendment.

Remember that constitutional amendments require a majority of those voting to pass. Consequently, those who do not vote on the amendment have the effect of voting “no”.

Please refer to the attachment for the overview that was distributed at the recent forum.
I hope you find it informative and helpful.

Have a pleasant weekend!

Best regards,
Sheila Kiscaden


Senator Sheila Kiscaden
District 30
325 Capitol
St. Paul, MN 55155
651-296-4848

Constitutional Amendment - Dedicating Motor Vehicle Sales Tax (MVST) to Transportation

The Situation

MVST is the sales tax collected on motor vehicle purchases. Currently, MVST revenues are allocated 46.25% to transportation and 53.75% to the general fund.  The 2005 Legislature passed a transportation bill which, among other measures, included a constitutional question to allocate 100% of MVST receipts to transportation.  Although Governor Pawlenty vetoed the bill, Minnesota law puts constitutional amendments outside the Governor’s veto authority and the MVST question survived to become law.

The amendment will pass if a majority of those voting say “yes” to the amendment.

A voter’s failure to vote on the amendment counts as a “no” vote. 

Amendment Wording

The MVST question reads:

“Shall the Minnesota Constitution be amended to dedicate revenue from a tax on the sale of new and used motor vehicles over a five-year period, so that after June 30, 2011, all of the revenue is dedicated at least 40 percent for public transit assistance and not more than 60 percent for highway purposes?  Yes....... No……

General Fund Impact

The additional MVST would be phased in at 10% of new revenue for each of four years. When fully phased in on July 1, 2011, the new monies will generate approximately $300 million a year or just under 1% of the general fund.

Where the Money Would Go

The funds would be shared by state, county and municipal transportation entities.  At least 40% of the funds would go to transit projects statewide. Up to 60% would be used for roads, allocated under a statutory formula:62% to state roads; 29% to county roads; and 9 percent to municipal roads and streets.

SUPPPORTERS

Minnesota’s transportation needs are enormous – the system needs up to $2.4 billion each year.

MVST is the only option in the current political environment.

Amendment is simply an extension of long-established practice of constitutionally dedicating taxes for transportation.

Adverse impact on general fund is slight. Amount is phased in over 5 years and enough inflationary dollars will be available to make up loss to general fund.

Could create new momentum for future transportation funding initiatives.

OPPONENTS

Would give favored treatment to one government function and would encourage similar amendments for other services.

Could divert attention from the real issue and could lessen its urgency.

Amendment will restrict Governor-Legislature flexibility in coming years.

The amendment was a small piece of a larger transportation bill and it surprisingly survived the Governor’s veto.
Illustrates the shortcomings of the election process which allows politicians to refer tough questions back to the voters.  It also undermines representative democracy which is based on thoughtful consensual decisionmaking, not interest group campaigns.

The state constitution should not be cluttered with complicated tax systems that the Legislature should enact.

The amendment tries to fill one hole by creating another and illustrates the Legislature’s fragmented approach to the problems with transportation funding.