The Minnesota Senate voted 36-31 Thursday to increase state funding for transportation projects by more than $1 billion over the next two years — and did so without imposing a 75-cent fee for packages delivered to your door.

Minnesota’s investments in roads, bridges and transit have “declined over time,” Senate Transportation Committee Chair Scott Dibble, DFL-Minneapolis, said at the start of the floor debate. “We are falling behind the rest of the country” in maintaining transportation infrastructure, he said.

The bill, which he sponsored, represents a “historic opportunity” to start providing dedicated and on-going revenue sources for transportation projects.

The Minnesota Department of Transportation has warned the state faces a $27 billion gap in funding needed for roads and bridges over the next 20 years unless lawmakers provide more money. Dibble said his bill would only fill about one-third of that gap, but it’s an important step in that direction.

He noted that $658 million of the $1 billion increase in the Senate bill would go for roads and bridges.

House version has 75-cent fee

The House last week passed a bill that also would increase transportation funding by $1 billion, but their version includes a new package delivery fee. The Senate Tax Committee cut that fee out of the Senate bill last week.

The fate of the fee proposal almost certainly will be decided in a House-Senate transportation conference committee that will be asked to resolve differences between the two chambers’ bills.

While the Senate did not accept the delivery fee, its bill does raise other taxes and fees by $2.7 billion over two years.

It would increase the sales tax in the seven-county metro area by 0.5 percent, compared to 0.75 percent in the House bill. The Senate version would raise $615 million in the next biennium, mainly to pay for bus and rail transit services.

The Senate bill would raise the statewide motor vehicle sales tax by 0.375 percent — from 6.5 to 6.875 percent. It also would increase license tab fees and motor vehicle registration taxes, plus a series of five smaller fees.

Current user fees failing to meet costs

The user fees, such as gas taxes, that Minnesota traditionally has relied on to fund roads, bridges and transit are falling behind forecasts.

For instance, the state Transportation Alliance reported, fuel tax revenue has fallen $20 million to $38 million below projections in the past year, tab fees are down $38 million to $45 million and motor vehicle sales tax revenue dropped $44 million to $48 million. Smaller revenue sources have declined as well.

“Minnesota has more than 600 structurally deficient bridges, thousands of miles of roads in poor condition and an inadequate transit system,” the Laborers International Union of North America said in a letter to senators supporting Dibble’s bill. LiUNA urged senators to vote yes “for a long-term and dedicated transportations funding package.”

The lead Republican on the Transportation Committee, Sen. John Jasinski of Faribault, praised the bill for addressing many of the state’s needs, but said he could not vote for a bill that raises taxes by $2.7 billion when the state has a $17.5 billion budget surplus. Most Republican senators agreed with him.

But Dibble noted, “There is no surplus in transportation.” The state’s needs for better roads, bridges and transit far exceed what the current revenue sources provide, he noted.