Budget surplus puts Dayton, Republicans on collision course over gas tax

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Governor Mark Dayton and House Republicans are on collision course over the former's proposed gas tax, in the wake of Minnesota reporting a $1.9 billion budget surplus Friday.

Dayton announced that state coffers had swelled even more than expected, $832 million more than expected, and laid out plans on how some of the money will be spent – including fully funding universal prekindergarten for all 4-years-olds, and ensuring college tuition fees will remain frozen for two years.

Irrespective of the surplus, Dayton and other DFL leaders remain committed to a 10-year transportation improvement plan costing $11 billion, according to the Associated Press, which will be funded partly through a 6.5 percent wholesale tax increase on fuel.

But House Speaker Kurt Daudt thinks news of the surplus should result in the proposed gas tax being nixed.

"I think this surplus means Democrats can stop talking about a gas tax in St. Paul," he said in a statement yesterday, according to the Star Tribune.

The Republicans' argument is that lower gas prices contributed to the surplus, MPR notes, so shouldn't be hiked to fund spending on the transportation plan.

Republican proposals

Instead, the GOP is following a "give it back" policy that calls on the Governor to focus on tax relief for Minnesotans.

The Pioneer Press reports Republicans will propose giving at least $900 million of the surplus back, for example by exempting Social Security income and veterans benefits from taxes.

Daudt also told the newspaper his party will be recommending new spending for K-12 education, transportation and nursing homes.

Results of a survey by KSTP published this week found that 51 percent of Minnesotans polled disapproved of Dayton using gas tax and increased vehicle registration fees to raise $6 billion to fund transportation improvements, with 43 percent approving.

Dayton will present a revised budget plan in the week of March 9.

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