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Capitol roundup: Action on gas tax increase, tuition freeze

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Lawmakers in both houses of the Legislature took action on major issues Monday. Here's a summary.

Senate approves transportation bill, gas tax increase

The Minnesota Senate passed a bill Monday that pays for road and bridge repairs in part by increasing the state's gasoline tax. The final vote in the DFL-controlled chamber was 36-27. All Republicans voted against the bill, as did two Democrats, the Associated Press reports.

The measure would raise more than $6 billion for road and bridge work by adding a 6 1/2-percent wholesale tax on gas sales and increasing license tab fees.

Democrats argue the huge repair plan is warranted because many of the state's roads and bridges are more than 50 years old and need to be replaced soon.

It would also increase the sales tax in the seven-county Twin Cities metro area to pay for transit projects, according to MPR News.

The Senate plan is far different than the package passed by the GOP-controlled House last week.

The Republican plan would not raise taxes, but would use some of the state's budget surplus and reallocate existing tax revenues from things like auto parts, leased vehicles and rental cars to pay for road and bridge projects, according to KARE 11.

Gov. Mark Dayton's proposal is similar to the Senate's approach. House and Senate negotiators will spend the next few weeks trying to reach a compromise.

House approves higher ed bill, backs off on tuition freeze

A tuition freeze for students was the big debating point as the GOP-led House approved a funding bill Monday for the University of Minnesota and the Minnesota State Colleges and Universities System.

The $2.95 billion higher education bill passed on a vote of 72-55, but it doesn't include funding to cover the costs of continuing to freeze tuition at the U of M, and only a partial one at some MnSCU schools, according to Session Daily.

The House bill would increase spending for higher education by about $57 million over the next two years. That's much lower than the Senate's $205 million proposal and Gov. Dayton's $288 million recommendation.

Most of the increase would go toward MnSCU schools to provide a tuition freeze in 2016 and a 1 percent tuition cut in 2017 for students in two-year schools. Students at four-year MnSCU schools would only see a tuition freeze in the second year of the budget, according to Session Daily.

The University of Minnesota's funding would go up by only about $2.9 million, and that would be dedicated to improvements at the Crookston and Morris campuses.

The House bill must be reconciled with the Senate's proposal over the next few weeks.

DFLers unveil tax relief package

DFLers and Republicans also differ widely on their approach to tax relief. Democratic leaders in the Senate unveiled their tax bill Monday, which includes about $200 million in tax cuts to property owners and businesses that hire veterans, the Star Tribune reports.

At $460 million, their measure is just a fraction of the size of the House Republican tax plan which would provide $2 billion in tax cuts.

The main feature of the GOP tax bill is a one-time personal or dependent exemption, which supporters said could save a middle-class family of four $500 over the next two years.

It also would begin phasing out the statewide property tax, which is paid by businesses and corporations, at a cost of $450 million over two years.

The Senate plan would help hold down property tax increases by boosting state aid to cities and counties, which Republicans oppose, MPR News reports.

The Senate Taxes Committee will take up the bill Tuesday.

How far apart are they?

Some observers say the two parties are so far apart on these and other major issues that they might not reach agreement on all of them before the session adjourns on May 18.

The St. Paul Pioneer Press says a special session might be needed to resolve the gridlock, and some are even mentioning the possibility of another state government shutdown.

The Pioneer Press article looks at some of those scenarios in more detail.

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