DFL-controlled legislature hands $8 billion transportation bill to Walz for signature

HF2887 includes about $1.4 billion in new transportation-related taxes and fees for businesses and consumers.

Rep. Frank Hornstein, DFL-Minneapolis, who carried HF2887 and co-chaired its conference committee, said the legislation comes at a time when “driving around right now is particularly hazardous.” (Minnesota House Info/YouTube)

A nearly $8 billion finalized transportation bill has cleared the House and Senate and is on its way to the desk of Gov. Tim Walz to be signed into law.

On Sunday, the DFL-controlled House and Senate voted along party lines to pass the conference committee report for HF2887. That omnibus transportation finance bill includes nearly $1 billion in new taxes and fees dedicated to transit and roads that will come from three sources: a new metropolitan area sales tax increase of 0.75 percent, a 50-cent fee for all deliveries of retail goods over $100 and a gas tax increase indexed to inflation. An increase in fees for automobile registrations and a sales tax increase for purchase of automobiles will also add more than $340 million in new revenues for transportation expenditures over the next two years.

While DFL leaders touted the $1.4 billion in new taxes and fees included in HF2887 as a “historic, generational investment in transportation,” Republicans blasted the legislation by saying its funding of transit projects like a new commuter train from the Twin Cities to Duluth is “absolutely out of touch” with Minnesotans who haven’t asked for a tax hike amidst a $17.5 billion surplus.

‘Decades and decades of neglect’

The legislation will dedicate $7.85 billion to the Minnesota Department of Transportation over the next two years. It also includes nearly $580 million for the state Department of Public Safety. Rep. Frank Hornstein, DFL-Minneapolis, who carried HF2887 and co-chaired its conference committee, said the legislation comes at a time when “driving around right now is particularly hazardous.”

“We are so far behind in fixing our roads, bridges and transit systems,” Hornstein told his colleagues on the House floor on Sunday. “Decades and decades of neglect. We go big, we go bold. We make this generational investment today.”

Republicans who opposed the bill in both chambers said that historic tax hikes on consumers and businesses were unnecessary with a historic budget surplus. They blasted the bill for dedicated funding to mass transit projects — such as the Northern Lights Express passenger rail project that would run from the Twin Cities to Duluth.

“We are collecting enough money right now to fix our roads and bridges,” said Rep. Kurt Daudt, R-Crown. “If we would focus that money on our priorities, we could fix these roads. Instead, we are wasting it on all these trains and crap that doesn’t work, that are way too expensive and we do not need. And this bill doubles down. Don’t let a pothole on the road be the excuse Democrats can convince you they need more of your money.”

But DFL legislators defended those new transit investments, including the $194 million the state will dedicate to the proposed Northern Lights Express project, which will be matched with 4-to-1 federal transit dollars.

“I watch a lot of scifi movies and futuristic movies and there is always trains in the future,” said Rep. Erin Koegel, DFL-Spring Lake Park, rebutting Republicans who criticized the need for the passenger train. “They even build them on asteroids in the expanse. I just don’t understand. I think trains will be around for awhile.”

Delivery fee inserted at 11th hour

Inclusion of the delivery fee in the conference report for HF2887 — which will go into effect on July 1 — was somewhat of a surprise as it had appeared earlier in the session that the delivery fee was dead after Sen. Ann Rest, DFL-New Hope, said she would not support a proposed 75-cent fee on all retail good deliveries. Conferees on the omnibus transportation bill over the weekend agreed to a modified version that will trigger the 50-cent fee for every retail delivery over $100, excluding food and clothing. Democratic leaders in the House and Senate repeatedly emphasized to media in recent days that they are branding the provision a “road maintenance fee.”

The HF2887 conference committee’s 11th hour inclusion of that delivery fee provision came even as a cavalcade of business organizations have lobbied against it. Organizations that have testified or submitted written opposition to the delivery fee include: the Minnesota Chamber of Commerce, Hospitality Minnesota, Minnesota Retailers Association, Minnesota Grocers Association, Minnesota Service Station & Convenience Store Association, National Federation of Independent Business, Minnesota Licensed Beverage Association, and Minnesota Municipal Beverage Association. The only other state in the nation with such a delivery fee is Colorado.

The bill features spending for a plethora of new transportation infrastructure improvements, including $68 million for intersection improvements along Highway 65 in the north metro. First-term House Rep. Matt Norris, DFL-Blaine, strongly advocated for that project. Norris won his election last fall by 403 votes.


Hank Long

Hank Long is a journalism and communications professional whose writing career includes coverage of the Minnesota legislature, city and county governments and the commercial real estate industry. Hank received his undergraduate degree at the University of Minnesota, where he studied journalism, and his law degree at the University of St. Thomas. The Minnesota native lives in the Twin Cities with his wife and four children. His dream is to be around when the Vikings win the Super Bowl.