The Minnesota Senate on Thursday passed a transportation budget bill that contains $2.7 billion in tax increases, including tab fees and vehicle registration taxes, an increase to the metro area sales tax, and motor vehicle tax hikes. The tax increases are part of Democrats’ $10 billion tax increase agenda, which they are seeking despite the state holding a record $17.5 billion budget surplus.  

“With a $17.5 billion surplus, there is absolutely no good reason to be raising taxes and fees for folks across the state,” said Senator Jeff Howe (R-Rockville). “Minnesotans are already grappling with higher costs in their daily lives, and there is no reason we should be raising vehicle taxes, registration taxes, and the metro sales tax. We had a golden opportunity to make targeted investments in our failing roads and bridges, we had the chance to address safety concerns on our transit systems… Yet instead of addressing those concerns, Democrats opted to raise taxes that will affect every person across the state. This is not what folks want, and it is shameful.”

Despite the largest surplus in state history, Democrats are proposing roughly $10 billion in tax increases spread across their budget bills. In the transportation bill, Democrats propose raising $2.7 billion in taxes: 
 

• $901.81 million: 8% increase to the vehicle registration tax. The bill also slows the vehicle depreciation schedule, so people could pay up to 33% more every year 
• $223 million: Increasing license tab fees. This is a $7.50 fee per transaction, so everybody will pay more 
• $214.8 million: Increasing the motor vehicle sales tax 
• $1.397 billion: Increasing the metro area sales tax. 83% of this revenue would be used for metro transit, while only 17% would be used for metro county roads. Collar suburbs will be shortchanged by this provision — they would pay the additional tax but receive very little funding back because most metro transit is in the core cities of Minneapolis and St. Paul. 
• $59.90 million: Additional taxes and fees that go to the state of Minnesota 

Notably instead of adding law enforcement to crack down on crime on and around light rail lines, the bill provides funding to hire “transit ambassadors,” who are trained to confront criminals by providing information about assistance programs like social services and safe housing. They are empowered to issue low-level administrative fines and little else. 

Sen. Howe also brought forward three amendments that were struck down:

• Prohibiting additional taxes from going to the failed Southwest Light Rail
• Exempting 100% disabled veterans from paying certain transportation fees

Exempting the trucking industry from the increased Motor Vehicle Sales Tax