CHICAGO - The Minnesota House may attempt as soon as today to override Gov. Tim Pawlenty's veto Friday of a partially bond-financed, $6.6 billion transportation package that relies for funding on a series of tax and fee increases.
The House and Senate - both controlled by the state's version of the Democratic Party known as the Democrat-Farm-Labor Party - approved the plan late Thursday, sending it to the Republican governor's desk where he vetoed it.
In his veto letter, Pawlenty slammed the package's reliance on tax increases. "I am disappointed that the conference committee did not adopt my transportation proposal and once again overreached. This type of overreaching has resulted in a transportation funding stalemate at the capitol for too many years," he said.
The House approved the bill 89 to 44, with the support of six Republican members. For the override to succeed, at least 90 votes are needed. In addition to 42 Republican no votes on the initial bill, two Democrats also voted against it. The Senate endorsed the bill in a 47-to-20 vote, with support from all Democrats and two Republicans, for a veto-proof majority.
The bill relies on new revenues from a five-cent per gallon increase in the gasoline tax with room for an additional 3.5-cent future increase to repay about $2 billion in new borrowing. License fees for some cars and trucks would rise. Also, the seven counties around the Twin Cities could raise their sales taxes by one-quarter cent and levy a $20 fee on new vehicles to raise funds for transit projects. Other counties could also raise their sales tax to fund road improvements if approved by voters.
The legislative proposal provides about $660 million more in funding annually over 10 years. The plan provides a $25 tax credit for low-income state residents to offset the increase in gasoline taxes. About $1 billion of the new authorized borrowing would be completed in the next two years, with the remainder of the authorization permitted incrementally after 2010.
Democrats and some Republicans have promoted the plan as necessary to bring Minnesota's roads and bridges into a state of good repair and help boost the state's economy. Pawlenty prefers a more limited transportation package that doesn't rely on increased taxes.
Pawlenty has proposed a $1 billion capital budget that allocates $225 million for bridge construction and $416 million for transportation and would be financed primarily with general obligation borrowing in the coming years. Democrats want more funding in the bonding bill for general projects with transportation funding allocated in a separate package.
More people have been focused on the state's bridges following the collapse of the I-35W bridge in downtown Minneapolis last summer. The eight-lane, 40-year-old steel truss arch bridge across the Mississippi River buckled and collapsed, killing 13 and focusing both state and national attention on the condition of the country's bridges and infrastructure.
Minnesota's $4 billion of GOs are rated AAA by Fitch Ratings and Standard & Poor's and Aa1 with a positive outlook by Moody's Investors Service. The state's trunk highway bonds are included in that figure, as they carry a GO pledge, though the state taps revenue in its road fund to repay the bonds.