- Associated Press - Monday, March 23, 2015

ST. PAUL, Minn. (AP) - House and Senate Republican leaders unveiled a $7 billion plan on Monday to upgrade Minnesota’s roads and bridges that would tap into the state’s budget surplus, reroute existing tax revenue and borrow billions over the next decade.

The plan is smaller than Democratic Gov. Mark Dayton’s nearly $11 billion proposal, primarily because it would allocate far less funding for mass-transit projects. The two plans are closer in size when only comparing spending on road construction, but the Republican proposal wouldn’t raise gasoline taxes or rely on new fees, as Dayton’s would.

“Minnesotans have made it very clear to us what they want is a safe ride to work, they want the potholes filled, they want congestion relieved on the highways, and that’s what we’re offering here today,” said House Majority Leader Joyce Peppin.

House Speaker Kurt Daudt, a fellow Republican, added, “We can solve this problem without a gas tax.”

In the Republican proposal, hundreds of millions of dollars in taxes from auto part sales, rental vehicles and leases would be funneled into a new “Transportation Stability Fund” instead of going into the general treasury where they help support schools, health care or other programs. House Republicans intend to release a broader blueprint on Tuesday that lays out their budget priorities and plans for the rest of the $1.9 billion projected surplus.

House Minority Leader Paul Thissen, a Democrat, criticized the proposal as an irresponsible raid on the general treasury.

“Unfortunately, the Republican plan is the same old shifts and gimmicks budgeting we’ve come to expect from them,” Thissen said in news release. “Siphoning money from schools and hospitals and relying on the state’s credit card is no way to fund Minnesota’s transportation system.”

Dayton said feeding off those other taxes is ill-advised because it puts transportation in direct competition with other state priorities, primarily education.

“It perpetuates the mythology that you can get something for nothing,” Dayton said.

But the governor said it was an important step forward that the sides seem to agree on the extent of the 10-year need - at least $6 billion for road construction - even if they remain apart on the source of the money.

Aside from the tax shift, the GOP transportation plan would also use about $230 million of the surplus for a one-time transportation infusion and would borrow $2.3 billion. About $1 billion of the borrowing would be general obligation bonds, which matters because they would take a three-fifths majority to pass. Republicans, who hold 72 of 134 House seats now, said they wouldn’t act on that aspect of their proposal until next year.

Senate Democrats are advancing a plan similar to Dayton’s. It would create a new wholesale tax on gasoline, assessing it on the cost of fuel rather than a per-gallon basis. It would be imposed on top of the current 28.5 cents-per-gallon tax. And the Senate bill and Dayton’s plan also would raise the general sales tax in the seven-county metropolitan area to finance dedicated bus routes and commuter rail projects.

The Republican proposal would put about $32 million per year toward mass transit, split between the Twin Cities region and the rest of Minnesota. Daudt said he believes most people favor road repairs over new rail lines.

Dayton and members of his administration have spent months touring the state to promote his projects and to highlight stretches of road that would be repaired or replaced.

After outlining their plan at the Capitol, Republican legislators fanned out to Duluth, Mankato, Owatonna, Rochester, St. Cloud and other places to pitch their alternative.

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