Constitutional amendment still in mix as session heads into final stretch

A proposal to have Minnesotans vote on a constitutional amendment to dedicate the portion of the sales tax attributable to revenue on auto parts continues to march along, especially in the House. The proposed amendment had hearings in the House Tax Committee and Ways and Means Committee this week and is poised for action on the floor whenever House leadership decides the time is right.

The progress on the Senate side is more complicated, with Senate Majority Leader Paul Gazelka (R-Nisswa) acknowledging in an MPR story that they may not have the votes, especially if no Democrats are willing to vote for the bill. The measure is currently awaiting action in the Senate Tax Committee, where it has been languishing for weeks. Sen. Roger Chamberlain (R-Lino Lakes), chair of the committee, is rumored to be opposed to the amendment.

During a meeting on Tuesday, the CGMC Board of Directors affirmed its opposition to the amendment because of the negative impact it would have on the state’s general fund and the threat that poses to the LGA program. When fully phased in, it is estimated that the amendment could sequester up to $300 million a year for roads and bridges that currently goes into the general fund. For context, that is more than half of the entire yearly appropriation to LGA.

The CGMC continues to oppose the amendment despite the inclusion of dedicated money for the small-city streets program (approximately $12.5 million a year once fully phased in) because the risk to the general fund is greater than the benefits that the amendment may bring.

Even before Minnesotans get a chance to vote on the amendment (should it pass the Legislature), the state’s surplus will likely be completely spent by this Legislature when you factor in the costs of this year’s efforts on tax conformity, the supplemental budget bill, the pension bill and tax cuts from last year’s tax bill.

Stay tuned for more developments and potential action alerts on this issue as the session comes to a close.