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.  

“This bill includes massive tax increases despite a historic surplus, and it is unconscionable that Senate Democrats support raising taxes at such an alarming rate,” said Senator Eric Pratt (R-Prior Lake). “These higher costs won’t be funding roads and bridges, but they will adversely affect every family across the state. It is incumbent upon us to be good stewards of taxpayer dollars, and that means budgeting conservatively and prioritizing funding. Unfortunately this bill fails to do that, but it does ensure every Minnesotan will be paying more in additional taxes every single year.”

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, ensuring everyone 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. 

“Though this is a costly bill, there are a few good portions that address transportation concerns around the state,” continued Pratt. “Specifically, this bill includes funding for Corridors of Commerce, ensuring that suburban counties get funding and a dedicated share of Department of Transportation projects. This bill also includes funding for school bus safety, safe road zones, and local road and bridge improvement programs. I am hopeful that as we head into the final weeks of session, we can work to lower the fee hikes and make this bill more workable for Minnesota.”