How much would a 20-cent gas tax hike actually cost you?

Gov. Tim Walz's proposed tax hike has proved controversial.
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A contested Minnesota gas tax would have an impact on commuters throughout the Twin Cities, but proponents of DFL Gov. Tim Walz’s proposed 20-cent increase per gallon of gas say the revenue would address important transportation problems in the state.

Bridget Siljander, a human rights activist, recently moved from Plymouth to Minneapolis, largely to shorten her commute and reduce the expenses that came with it. Siljander said the strain of her previous commute was a burden to the extent in which she had to cut money in her budget for other needs, like food.

Siljander said while infrastructure for roads, bridges and services like public transportation are vital, the state should look toward other revenue sources. The gas tax would add to the burden already faced by individuals with commutes like the one she had, Siljander said.

“[The gas tax] hurts lower income people and the working poor, and basically anyone who’s not rich,” she said.

Minnesota drivers currently pay a total of 28.6 cents per gallon in state taxes, putting the state in the middle tier of the country in terms of gas taxes. With the proposed 20-cent increase, Minnesota would fall into the upper tier of gas taxes, joining states like New York (45.35 cents) and Washington (49.4 cents), according to the American Petroleum Institute.

Commuters with a 30-mile round-trip commute could see an increase upwards of 40 cents a day under the tax.

Based on a 5-day working week in a vehicle averaging 15 mpg, and not including weekend or after-hours travel, this would work out to an extra $104-a-year.

For those with a 20-mile round-trip, costs could go up 26 cents per day for those with less fuel efficient vehicles – or $67.60 per year. For commuters averaging higher gas mileage, a 20-mile commute could result in an increase of 10 to 15 cents per day – or $26-$39 extra per year.

For commuters in the inner Twin Cities metro, a 10-mile round-trip would cost an extra 5 cents per day, or $13 per year, in a 40 mpg vehicle; while those with low efficiency vehicles on the outskirts could pay an extra $170 a year based on a 50-mile round-trip.

The fight in the Legislature

Walz first unveiled his transportation budget in March. The gas tax is part of the governor's plan to raise an additional $6 billion for the state’s roads and bridges over the next 10 years.

House Democrats laid out a similar proposal in their omnibus transportation bill earlier this month, suggesting the state raise gas taxes by 5 cents annually over the next four years. Walz’s proposal would raise the tax in just two years.

“[The omnibus bill] establishes permanent, sustainable and ongoing funding for transportation that meets the needs of our growing state,” said House transportation committee Chair Rep. Frank Hornstein, DFL-Minneapolis, at a press conference earlier this month. “The gas tax is dedicated to roads and bridges in our constitution… It will meet the state’s established road and bridge needs.”

But Senate Republicans rejected that proposal, putting forward a transportation bill that did not include the gas tax, instead favoring money from the General Fund for transportation infrastructure.

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Senate transportation committee Vice Chair Sen. John Jasinski (R-Faribault) said the gas tax would put Minnesota among some of the most heavily taxed states for gas in the nation.

Republican lawmakers highlighted an analysis by the Minnesota Department of Revenue published last week that pointed to the disproportionate impact Walz’s proposal, including the gas tax, would have on low- and middle-income individuals.

According to the analysis, Walz’s tax plan would increase the tax burden for individuals earning less than $14,528 annually by 2.37 percent. But individuals earning more than $185,601 annually would see their tax burden increase by just 0.49 percent.

This is despite Gov. Walz planning to increase working family tax credits by $100-$200 to soften the blow of the gas tax hike.

“No matter who you talk to, people would like to see more money put into roads and bridges,” Jasinski said. “The part that concerns me with the governor's gas tax… is that it’s very regressive. I think it’s the most regressive tax there is.” 

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