The Minnesota Senate passed a bill that will fund the state’s road and bridge repairs by raising the gas tax. The newly approved bill would add 6.5% tax on fuel, which is expected to raise more than $400 million for 2016, and more than $6 billion over the next ten years.
Senate lawmakers voted 36-27 in favor for the state transportation funding bill.
This means that drivers will have to pay an additional 16 cents per gallon until prices reach $2.50 per gallon. If the price per gallon rises above that level, the tax would become 6.5% of the total price at the pump.
Under the Senate plan, the vehicle registration tax would rise from its current 1.25% of a vehicle’s value to 1.5%. It also would add a $25 late fee per month for vehicle registration, capped at $100.
Minnesota Gov. Mark Dayton is in favor of the Senate’s efforts to rebuild and repair the state’s crumbling infrastructure, but the plan differs greatly from the Republican-controlled House’s proposal.
House GOP lawmakers are looking to draw from the state’s budget surplus and reroute existing tax revenue to pay for infrastructure projects.
The House and Senate will spend the next few weeks to reach a compromise.
