Gas Tax: Where does the money go?

3:39 AM, Feb 28, 2008   |    comments
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It's been a historic week for taxation in Minnesota. Minnesotans will pay an extra $6.6 billion over the next decade in extra taxes after the legislature voted to override the governor's veto of the transportation bill. This is sensitive and controversial here in Minnesota, where the deteriorating condition of roads and bridges has been under such scrutiny. And, in a place where state gas tax money is used to protect against such things. KARE 11 did an Extra, MnDOT's Financial Fork in the Road, last November that showed how roads and bridges are funded in this state. We showed how most of the money comes from the state gas tax, plate fees and a motor vehicle sales tax. We also reported that those revenue sources have taken real hits over the years. The gas tax, until yesterday, had not increased in a couple decades. License plate fees were cut sharply a few years ago and about 40 percent of the motor vehicle sales tax money now goes to light rail. The report also showed how Minnesota's gas tax is among the lowest in the upper Midwest. After airing the report, we heard from hundreds of viewers, angry with the suggestion that we aren't taxed 'enough' in Minnesota. Many, fairly stating, we should look not just at the gas tax, but at the total level of taxation in this state and at least consider the question, "is this money being well spent?" It's true that the state of Minnesota ranks 12th in the nation for state and local taxes paid on a per capita basis. So you can choose to measure the value of this gas tax as, "Can we afford another 8½ cents per gallon?" or you could also fairly ask the question, "Is our tax money being very well spent to start with?" Many people who've written to us are saying we should get to the bottom of how well the money is being spent. In a 'classic' email sent directly to KARE 11 News reporter Rick Kupchella in the last few months, a man who identified himself as Robert Guist said: "I often pay over $1,000 a week in taxes... Devils like you would like me to pay even more...You are a disgusting filthy animal...May you get what you deserve you satanic loser." Clearly, we struck a nerve. Plowing through all the emails sent to us over the course of the last few months on this issue, we've come to a few basic conclusions: First - people are still angry about the level of taxation in this state, if not the gas tax specifically, the tax burden overall. Second - there's a tremendous amount of distrust in state leaders when it comes to managing state money. Third - the public has a lot of bad information in terms of what's real. We heard from people like 23-year-old Rene Ramirez who lives in a one bedroom apartment in Richfield and works for a food service company. Ramirez wrote us, "The cost of living here is insane, welfare is out of control, and now we have a news program demanding the state keep raping workers and families with more taxes." When we contacted him to go over his concerns, he said, "I was pretty upset. I'm not going to lie about it." We also heard from guys like Mark Daggy, reeling from a tax hike at his home of 17.5 percent. He's a road construction supervisor, the kind of guy who would literally and professionally benefit from a tax hike to build more roads since it's literally what he does for a living. But he doesn't care. He doesn't want the tax. He doesn't believe it will trickle down to him. "I don't know where the money is going," he told us. "I don't believe 'em, I don't trust 'em at all." Like so many people who've written us over the last couple months, Daggy has become convinced through talk radio and other sources that the gas tax money is going to light rail. "When they get that 'big bucket o money' - who knows where it's going? This guy gets a cut. This guy gets a cut. The legislator votes themselves in a raise. They get more per diem. Where is it going?" said Daggy. Still another person who contacted us was Mark Gschwind, a business consultant from the north metro who says the only thing worse than the drive for more taxes is the inability to drive on our roads in this state where congestion is getting worse all the time. "The 'black helicopter theory' is that there's been an intent to create congestion," he says, "so that we can move people out of automobiles into mass transit and begin to control where people live." All these guys, and hundreds more who wrote us, share a bottom-line belief that more money is not the answer. We're taxed enough. And while that may be a 'fair' read of the situation, so much of the specific and detailed information they use to make their case is flawed. That hurts their credibility. We'd like to clean some of that up and we'd like to start with all this talk about bike paths and light rail. The fact is, state gas tax money does not go to bike paths or light rail. That would literally be a violation of the state constitution. Before this latest hike in the gas tax, we've been raising about $660 million a year with the gas tax. All of it goes to roads and bridges. Period. The state raises another $490 million with plate fees. The fact is, all of it goes to roads and bridges. Period. Minnesota raises $160 million with the "motor vehicle sales tax." The fact is, 40 percent of motor vehicle sales tax money goes to transit, things like light rail and buses. Many people writing us complained this money is being "diverted" from roads and bridges. "Diversion" is a bad word for something that was decided by public vote just a few years ago. Finally, it helps to understand the scale of this whole thing. Roads and bridges are insanely expensive. Minnesota already spends $2 billion a year for roads and bridges. Now, even the legislative auditor says we need $3 billion a year, just to cover the basics. Our whole state budget is less than $18 billion a year for everything! Anyone would be hard pressed to blame the shortfall on light rail. The state will spend less than $1 billion dollars over 15 years building the Hiawatha, the Northstar, and the Central Corridor combined. It will take another $50-$100 million a year to run those rail lines. But our email senders, like Rene, say that money matters. He believes emphatically, "We need to repair what we have. We need to take a second look, a third look, a fourth look, before we build anything new." This issue is something that is motivates Ramirez to run for public office himself someday. "I was homeless for so many years. My mom was blind and so on. You see how things should be done and you see how things are currently being done," he said. "And obviously things currently being done aren't working very well." Mark Daggy said it's all about accountability. "Just like when money comes through our front doors, we have to account when it goes out and when it comes in. We need accountability," said Daggy. We took the stories of Mark and Rene, and others, to Margaret Anderson Kellerher, speaker of Minnesota's House of Representatives. We told her how so much of the frustration and anger in the public is based on a basic distrust of government. She sees it as largely "par for the course." "I think that is always a part of the relationship between the public and elected folks. And I think it goes back a few hundred years, to the way the country was founded," Anderson Kellerher said. Glen Dorfman has been a lobbyist on behalf of homeowners here for more than a quarter century. He says government distrust has ramped up in recent years. "I do think it started with the 60s kids, myself included, when we said 'question authority.' Well, now we're at the time when all authority has been questioned and therefore no authority is trusted," Dorfman said. When asked if that was a "good thing," Dorfman replied, "It was a good thing when the authority wasn't us." Kellerher admitted, "There needs to be more sunlight, more transparency in terms of how the money is spent and where it goes." And she says there's a specific need for more oversight of MnDOT, to help the public understand how the money is being spent. Dorfman sees the ongoing friction at the Capitol as rooted in something uniquely Minnesotan, beyond politics. We got here, he said, because "Minnesota-Nice" has a hard time with priorities. "It's always, 'we need more money,' Dorfman said, "because making the difficult decisions alienates somebody. And in a state where everybody wants to be liked, it's hard to make a difficult decision."

(Copyright 2008 by KARE11. All Rights Reserved.)

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