Minnesota units of government from the state to townships spend $5 billion a year on transportation, the overwhelming majority of it on roads and bridges. With U.S. motorways now drawing only about half their financing from user fees such as fuel and registration taxes, at least $2 billion in non-user subsidies, largely from local property taxes, make up the difference in Minnesota. It’s welfare on wheels.
Conservatives who denounce other forms of welfare seem to like it that way. They make appealing arguments that boosting user support of infrastructure for motor vehicles would impose regressive burdens on the poor and middle class. That’s true in a formal sense, but it ignores considerations of scale as well as the likely benefits of a road system well funded by its users.
On scale, consider this: For the average driver, a penny-per-gallon increase in the gasoline tax costs about 50 cents a month. For state, county, city and township roads, however, it raises millions. Likewise, the $10-per-vehicle wheelage tax now under consideration in many Minnesota counties comes in at 83 cents a month. Oh, the humanity!
Hennepin County, which declined in the past to levy a $5 wheelage tax, is on the verge of approving the $10 impost authorized by the state this year. It’s estimated to raise nearly $9 million annually for the state’s biggest county beginning next year. Several counties in southern Minnesota have already approved the new fee, which previously was restricted to the Twin Cities metro. As with the fuel tax and tab fees, wheelage revenue may be spent only on roads and bridges.
Jeff Johnson, a conservative Hennepin County commissioner running for governor next year, said he’ll vote no on the wheelage tax next week, arguing that if more money is needed for county roads it should come from general funds. In other words, let’s keep socializing driving. Proponents on the board point out that a wheelage tax could rein in another regressive levy, the property tax.
Minnesota has none of the traditional toll roads and bridges found in many other states. If you’ve driven on any of them, you know a $10 yearly charge is a vanishingly tiny investment in the future of toll-free travel here. Minnesota fuel taxes also are lower than the national average. Unfortunately, our winter weather and the extent of our 140,000-mile road system push our maintenance costs higher.
Something’s gotta give. A locally-approved wheelage tax is one way to nudge our motorways toward the firm foundation of user financing.