Despite Higher Prices, Some Minnesota Lawmakers Push For A Gas Tax Hike

NEW HOPE, Minn. (AP) _ Gas is a big expense for a company that has 40 truck drivers clocking 500 miles a day, especially with fuel costs hitting new highs all the time. <br/><br/>But that hasn't stopped

Thursday, May 17th 2007, 7:27 am

By: News On 6

NEW HOPE, Minn. (AP) _ Gas is a big expense for a company that has 40 truck drivers clocking 500 miles a day, especially with fuel costs hitting new highs all the time.

But that hasn't stopped Liberty Diversified from supporting a nickel boost in Minnesota's 20-cent gas tax, to help pay for road projects aimed at clearing up traffic jams around Minneapolis-Saint Paul.

``We don't see it so much as a tax increase but as a business investment,'' said David Lenzen, executive vice president of Liberty Diversified, a private company that delivers its packaging products around the Upper Midwest. ``Gas prices go up and go down, but having our drivers stuck in traffic always costs us money.''

Big business has been a key ally to Minnesota lawmakers trying to push through the gas tax increase at a time when spiraling gas prices are making it a tough sell with the public. Other states are going in the opposite direction: Lawmakers in both Connecticut and Texas are pushing summer-long gas tax holidays, to give relief to drivers headed to summer getaways.

``At least in our own little way, we can show the people in the state that we can do something for them while we try to figure out the bigger solution to this problem of ridiculous gas prices,'' said Sen. Louis DeLuca, the Republican leader in the Connecticut Senate.

According to AAA, the nationwide average price of regular unleaded was $3.103 on Wednesday _ which set a record for the fourth day in a row.

Minnesota's not the only state looking at hiking its gas tax in the face of those high pump prices. Nebraska lawmakers proposed a 1.8-cent-a-gallon increase, also for road-building, but Republican Gov. Dave Heineman says he'll veto it because of high gas prices.

In Michigan, a bipartisan group of lawmakers is urging a 9-cent-a-gallon gas tax tied directly to fixing crumbling highways, although that would be offset by reducing a separate state sales tax on gasoline _ which goes into the state general fund, not to highway projects.

``We're trying to kill two birds with one stone _ getting more money for roads without increasing the amount people pay at the pump,'' said Rep. Craig DeRoche, Michigan's House Republican leader.

In Minnesota, large majorities in both chambers of the Legislature voted for the nickel boost. Republican Gov. Tim Pawlenty swiftly vetoed it _ and has been quick to mention that with gas prices what they are, maybe now isn't the time for the state to pile on.

Boosters of the plan hope to assemble enough votes to override Pawlenty's veto in the next few days. They're leaning hard on Republicans who represent highway-dependent suburban districts. Eleven Republicans joined all but two Democrats in passing the bill, but some of the GOP legislators are reluctant to trump their governor.

It's a tough sell. Opponents point out that 5 cents has the potential to turn into 7.5 cents because of a provision that would allow a gradual increase to pay off bonds on borrowing to pay off other road projects.

Betty Stulberg, who was filling her minivan's tank in suburban New Hope, said she agreed with the governor _ and doubted that a nickel more on the gas tax would do much to relieve congestion.

``I'm still going to be sitting in traffic. I'm just going to have even less money in my pocket,'' Stulberg said.

A chief architect of the increase, Democratic state Sen. Steve Murphy, admitted that the gas price climate has made his job tougher. But he said lawmakers can't neglect the deteriorating transportation infrastructure because of factors beyond the state's control.

``Gas prices run up every spring and summer, and they tumble back down every fall,'' Murphy said. ``Adding a nickel to the gas tax now is kind of like spitting in the ocean.''

Minnesota hasn't seen a gas tax increase since 1988. Since then, 45 other states have raised their gas taxes, Murphy points out.

Taxi driver Drake DiMuro said he gets tired of sitting in traffic. He's ready to pay the extra nickel.

``Five cents doesn't make that much difference,'' DiMuro said. ``To me it's an insignificant amount. I'm much more concerned about the bigger picture.''