The Minnesota Senate on Thursday passed a transportation budget bill that contains $2.7 billion in tax increases, including tab fee 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.  

“I’m incredibly disappointed that Minnesota has a historic surplus, yet the bills that are being passed focus on raising taxes and fees on Minnesota families that have been asking for relief,” said Senator Karin Housley (R-Stillwater). “We’ve been hearing from families across the state all year—they want meaningful tax relief, safer communities, safe roads, and targeted investments. This bill instead focuses on raising taxes, forcing families to once again dig into their pocketbooks to cover rising costs. While this bill includes a number of good areas like funding for school bus safety, Corridors of Commerce funding, and road and bridge improvement programs, the increased fees are simply not workable.”

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. 

“As we head into the end of session, there needs to be a strong bipartisan effort to improve these bills so we can focus on meeting the needs of Minnesotans without asking them to pay higher taxes in the face of a historic surplus,” finished Housley.