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To the Point! is edited by John Marty, a Minnesota state senator. 

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$2 million in Gas Tax Revenues Siphoned from Highway Trust Fund
Minnesota Health Plan
Information and Resources
by Senator John Marty
March 23, 2006

Minnesota roads are pothole-riddled because of inadequate funding for construction and maintenance. Yet gas taxes are quietly siphoned off for other purposes.

These revenue losses are significant. Over $2 million each year could be saved for the highway trust fund just by eliminating the loss of dollars taken inappropriately for All-Terrain-Vehicle (ATV) and off-road truck (4 x 4) recreation.

At the behest of lobbyists for ATV and 4 x 4 truck owners, gas taxes paid by people riding ATVs and other off-road vehicles are removed from the highway trust fund into a special fund at the DNR to develop and maintain trails for them in state forests.

Perhaps it is reasonable to take gas tax revenue used by public trail riders and direct it to back to trail maintenance. However, there is no logical justification for taking gas taxes paid by people riding ATVs or 4 x 4s on private lands, and transferring them for use on public trails that those riders never use; trails many oppose because of concerns about damage to state forests and habitat.

There is also no logical justification for diverting gas taxes paid by people riding ATVs in roadside ditches, when the money is needed to repair erosion damage they cause to the roads.

The story is similar for off-road 4 x 4 driving. The state assumes that over 120,000 Minnesota 4 x 4 owners use an average of 34 gallons per year riding off-road. About $870,000 is allocated, each year, from those gas taxes to create obstacle courses in state forests. These obstacle courses are used by only about 7000 4 x 4 truck owners who buy permits so they can ride in the mud and winch their trucks over tree trunks and other obstacles.

Do Minnesotans who are dodging potholes and sitting in traffic congestion really want nearly $900,000 of gas tax money diverted to pay for 4 x 4 truck playgrounds that erode land and damage our forests, for such a tiny sliver of the state’s population?

Last year, the DNR conducted a new gas tax study calculating how much fuel is used for recreational ATV riding in order to determine how much tax revenue to divert to the DNR for ATV trails. The DNR study estimated that ATV riders used enough gas that they could increase the gas tax allocation for ATV trails from about $800 thousand to $1.4 million per year.

The DNR study also collected data to indicate where recreational riding was done, but they didn’t bother to tally that part of the study. The DNR reported only on the portion that would be used to justify increasing the funding they receive for ATV trails.

I requested the raw data from the other half of the study and asked an analyst to tally the numbers. The study showed that only 15% of recreational ATV riding is done on public lands and trails (the remainder is on private lands or in roadside ditches.) It is no surprise that the DNR had little interest in showing the results of the portion of the study that would cut their appropriation.

Governor Pawlenty’s budget calls for increasing that ATV trail allocation as if all the riding is on public land. However, recognizing that only 15% of the riding has any connection to public trails, a fair allocation based on the results of the entire study would decrease, not increase, the ATV trail funding. It would drop down to approximately $210,000 per year – a difference that would save almost $1.2 million for the highway trust fund.

With regard to the 4 x 4 gas tax distribution, a fair allocation should be limited to, at most, the gas tax paid by the 7000 drivers who buy permits to operate on the truck trails, not the 120,000 owners who never use those trails. The current allocation is a fraud. Even by the most generous accounting, the gas tax for 4 x 4 trails should be cut from the current $870,000 down to no more than $50,000.

Senate File 3462 is legislation I introduced that would recalculate the gas tax allocation for both ATVs and 4 x 4s to accurately reflect the results of the gas tax studies. ATV and 4 x 4 lobbyists will fight this legislation. But correcting these two misappropriations would provide an additional $2 million every year to help repair Minnesota's deteriorating transportation infrastructure -- that's a lot of potholes! It won’t solve all our transportation funding needs, but it would certainly help.




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