MN House panel approves 6-cent gas tax increase

05/06/2006

Measure unlikely to pass full House

BY PATRICK SWEENEY
Pioneer Press

State taxes on gasoline would increase 6 cents a gallon by mid-2007 under a bill approved Friday by the Minnesota House Taxes Committee.

The vote to raise the gas tax came despite a run-up in gas prices that has left motorists paying about $2.75 a gallon for fuel that a year ago cost just over $2.

And the vote on the gas tax came the day after the same committee killed an income tax reduction introduced by Republican Taxes Committee Chairman Phil Krinkie and House Speaker Steve Sviggum earlier this week.

Two Republican members of the Republican-dominated Taxes Committee joined 12 Democrats in passing an amendment, offered by Rep. Tom Rukavina, DFL-Virginia, to a transportation bill.

Rukavina’s amendment would raise the current 20-cents-a-gallon gas tax by 3 cents July 1 and another 3 cents July 1, 2007.

The two Republicans who joined the Democrats to pass the increase were Reps. Dan Dorman of Albert Lea and Ron Erhardt of Edina.

The transportation bill that includes the gas-tax increase now goes to the House Ways and Means Committee, which has a big Republican majority and is likely to delete the gas-tax increase.

It is not clear whether a gas-tax increase would pass the full House. Last May, a handful of Republicans, led by Erhardt, joined most of the House Democrats in approving a phased-in 10-cents-a-gallon increase. That bill was quickly approved by the Senate and then vetoed just as quickly by Gov. Tim Pawlenty.

Rep. Mary Liz Holberg, R-Lakeville, the sponsor of the transportation bill amended by Rukavina, said she did not believe the amended version would be approved by the House this year. Erhardt agreed with her that the tax increase probably would be defeated on the House floor.

“This is making the point that we have a roads crisis and something needs to be done about it. … This is all symbolism right now,” said House Minority Leader Matt Entenza, DFL-St. Paul. He predicted Pawlenty would again veto any increase in the gas tax.

Late on Thursday night, the Taxes Committee defeated the proposal by Krinkie and Sviggum to pass $800 million worth of income-tax relief now that would not go into effect until 2008. Rep. Ron Abrams, R-Minnetonka, joined Dorman, Erhardt and 12 Democrats in defeating the tax bill.

Sviggum acknowledged Friday that the income-tax cut had little chance of being enacted because of opposition from the Senate’s Democratic-Farmer-Labor majority. In that respect, the income-tax cut also was symbolic, rather than substantive, he admitted.

“But you’ve got to say the same thing about the Senate bill,” Sviggum said. He said a Senate-passed bill that would give tax cuts to individuals after reducing a tax break available to companies with foreign operations also has virtually no chance of being enacted.