CHICAGO—Minnesota would impose a tax on wholesale sales of gasoline to help generate at least $800 million in new revenue annually for transportation projects under a proposal unveiled by Senate majority leaders from the Democratic-Farmer-Labor Party.

The plan announced Monday would impose a 6.5% wholesale gas tax. The state currently levies a 28.5 cents per gallon sales tax. The plan also relies on higher registration fees and raising a .25 cent sales tax in the Twin Cities region to one cent.

The plan relies on borrowing $567 million in general obligation bonds and $1 billion in truck highway borrowing in the coming years.

Some of the proposals resemble a plan previously outlined by Gov. Mark Dayton, a DFLer. Republicans hold a majority in the state House. They also want more funding for transportation but want to tap the budget surplus revenues over tax hikes.

The state's most recent fiscal forecast shows a surplus of $1.037 billion available for the upcoming 2016-2017 budgetary biennium. That includes a $373 million ending balance forecast for the current 2014-2015 biennium, after $183 million is automatically diverted from the full projected $556 million balance to the state budget reserve under a new state law.

A state transportation panel warned several years ago of the need for $6 billion in new funding to keep the state's roads and bridges in a state of good repair.

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