ABC 6 Investigates The Money Trail: State Gas Tax

Updated: 05/18/2014 10:16 AM
Created: 05/16/2014 8:41 AM

(ABC 6 NEWS) -- You've probably noticed gas prices rising in recent weeks. Right now the average price in Minnesota is $3.48 per gallon according to AAA.

Looking at prices at the gas pump may cause you to look away.

"I think it's astronomical, it's really expensive," said Kelly Schroder of Rochester.

"It's the ultimate user fee. The people who use the roads pay for the roads and I think that's fair," said Representative Frank Hornstein, chair of the transportation finance committee. He's long supported a raise in the gas tax.

"MnDot estimates that by year 2020 if we don't increase our revenue we'll have 2,000 miles of crumbling roads," said Hornstein.

Every time you buy a gallon of gas you pay 28.6 cents in the state gas tax. Think that's too high?

According to the non-partisan Tax Foundation, 19 other states have a higher gas tax than Minnesota, including our neighbor Wisconsin. Its tax is 32.9 cents per gallon, but the highest is California at 52.5 cents per gallon.

There is one problem.

"We don't think it's a sustainable revenue source long term," said Tracy Hatch, deputy commissioner of MnDOT.

The gas tax doesn't increase as the cost of goods increases so MnDOT is looking for ways to find more funding.

"Minnesota has the fifth fastest growing economy in the nation right now so we need to stay on top of that," said Hatch.

"Infrastructure equals jobs," said Representative Hornstein.

"I'd support a raise if it means better roads and bridges," said Frank Hawthorne of Rochester.

This year, MnDOT projects $871 million will be raised from the state gas tax. That money funds statewide projects. From new roads, repairs, fixing potholes and even snow removal.

We asked how much is going to local counties from the gas tax. MnDOT says it doesn't have a breakdown of that, but we do know Olmsted County is getting $7.5 million from three separate funds, which includes the gas tax.

We asked Kelly Schroeder, a Rochester resident, if she thinks the gas tax money is being spent wisely. She said "In Rochester I think it is. In other parts of the state definitely not."

Representative Hornstein says a difficult thing is deciding which state projects will get money each year. He says there are so many needs, for example, he talked about the Highway 14 expansion in Southeast Minnesota.

MnDOT provided ABC 6 News with a full breakdown of how much money local counties are receiving this year in part from the gas tax. To view that click here:

Photo: ABC 6 News