PoliGraph: Largest gas tax in state history?

poligraph-accuratePoliticians love to exaggerate.

One of their favorite claims is that something is the largest [fill in the blank] in Minnesota’s history – the largest spending increase, the largest tax cut, the biggest investment.

House Speaker Kurt Daudt of Crown made one such claim in response to Gov. Mark Dayton’s proposed supplemental budget, which invests big in education.

He said that with a nearly $1.9 billion budget surplus, Dayton should back off his plan to raise the state’s gas tax to pay for road and bridge construction.

“Frankly, it would be the largest gas tax increase – I think – in state history,” Daudt said.

History mostly supports Daudt’s claim.

 The Evidence

The tax has gone up at various times since 1925, when the first gas tax of 2 cents per gallon was put on the books.

Dollar-wise, those adjustments have been relatively small – a few cents at the most.

In a few instances, it’s a different story when the charges are adjusted for inflation. That first 2 cents per gallon gas tax enacted in 1925 amounts to 27 cents today. And in 1937, a 1 cent increase in the gas tax translates to exactly 16 cents today.

The most recent bump came in 2008, when the Legislature overrode a veto by Gov. Tim Pawlenty to put an incremental gas tax increase of 8.5 cents per gallon into law. When the law was passed in 2008, it represented the largest gas tax in Minnesota’s recent history.

Right now, people pay 28.5 cents tax on every gallon of gas they purchase in Minnesota.

Dayton, Democrats in the Minnesota Senate and a host of transportation interests, including labor unions, want an additional 6.5 percent sales tax levied at the wholesale level to help pay for road and bridge construction that’s part of an $11 billion transportation plan that spans 10 years.

Why the wholesale level? It’s partly logistical, because that’s where the gas tax is already collected. It might also have the effect of disguising the actual cost of the additional tax when people pay at the pump.

Proponents of Dayton’s plan want a sales tax over a per gallon tax because they say cars have become more efficient and people are driving less, which reduces the amount of money the state collects from the per gallon tax.

Dayton’s proposed tax would be calculated annually based on the average wholesale cost of a gallon of gas over the previous year – so it would change, but not daily.

But Dayton’s proposal includes a cost floor to ensure the state collects enough revenue.

So, under Dayton’s plan, the tax amounts to at least 16 cents per gallon, bringing the total gas tax paid at the pump to at least 44.5 cents per gallon.

The Verdict

Aside from two gas tax bumps decades ago that have been adjusted for inflation, the 16 cents per gallon increase would be the highest in state history.

Daudt’s claim earns an accurate.