Proposed Amazon delivery fee to raise money for Minnesota transportation appears dead

New charges on home deliveries — think Amazon and Los Angeles pizza — to boost state transit projects appear to be on the brink of death after a toll sponsor admitted Thursday that he did not have enough DFL votes in the state senate.

The 75-cent fee would have raised more than $150 million annually, and was seen as an alternative to higher gas taxes, which were politically unpopular and have not been increased since 2008. In addition, gas tax revenue has remained flat and is expected It started to decline because cars became more efficient or became electric.

Delivery fees now proved politically unpopular as well. During a meeting of the Senate Tax Committee, Senate Transportation Committee Chairman Scott Dibble moved to adjust his transportation budget to remove the fee. The same amendment cut off but didn’t kill another new financial source: the sales tax in the seven-county metro area. What was previously a 0.75% sales tax for territorial transit has become a 0.50% tax. What used to raise $600 million a year will now raise $400 million a year.

These two changes reduced the transportation’s growing revenue from $1.1 billion annually to $700 million. Delivery toll revenue would have been distributed between state highway accounts and city and county road funds. The metro area sales tax will go to transit and roads in the metro area, where most of it goes to transit.

Dibble said he asked to amend his bill because he did not have the votes in his caucus. He blamed the novelty of delivery fees, a transportation financing method used in Colorado but few other jurisdictions.

“It took me a little bit longer to work through politics and politics, a lot of people just didn’t understand,” Minneapolis Defler said after the tax commission’s vote. He called the two changes unfortunate because even with them in his budget bill, the state was only solving part of the transportation funding shortfall.

“We are falling further and further behind in maintaining our road system, which is in very poor condition,” he said. The remainder on his bill increases vehicle registration tax and vehicle sales tax.

Connection fees are still in the House transportation budget bill, and Dibble said he expects it to be discussed when the House and Senate try to settle their bills in convention committee later in April. But he said it would be a “difficult task” to win support for her in his caucus later.

While calling the remainder of his revenue plan a “good move,” he said lawmakers will have to return to the issue of continued funding in future cycles.

“These maintenance needs are not going away. They are just going to go up,” he said. Dibble favors an increase in the gas tax, something many other countries are doing. But it became a campaign issue that Republicans used against the DFB, leaving many members, especially those who live Swinging areas, reluctant to take them in. This political reality is what prompted transit chairs to seek other ideas such as delivery fees and ride fees like those on Uber and Lyft. This, too, was proposed and canceled this session.

While sales taxes aren’t new and lawmakers are familiar with them, Dibble said there weren’t enough votes in his caucus for a 0.75% increase. He said he would have preferred a full percentage increase in the sales tax as a way to subsidize the bus and rail system which Dibble described as on the brink of collapse due to a lack of sustained revenue.

DFLers control the majority in both houses, but the Senate’s advantage is only one vote. Republicans unanimously oppose increasing taxes on public services or transportation. They suggested using the surplus funds to catch up on road projects and allocate more sales taxes collected on the sale of auto parts to transportation. Revenues are now divided between road funds and the state’s general operating budget.

The main sponsor of Home delivery charges She said she was not ready to give up. DFL-Spring Lake Park Rep. Erin Kuigel said she expects to remain in the House bill.

“It came as a surprise to me,” Kuigel said of the Senate’s decision. “I was still hoping it would get somewhere, but now it’s up to our others to really push this issue and make sure they know we can’t continue to ignore our streets and our ways.”

Coogle said she has looked into what Colorado is doing over opposition to gas tax increases. If other lawmakers don’t like her new ideas, they can revert to the “tried-and-true” method of financing transportation. But she said it was frustrating for politicians to oppose any new revenue because of politics. Gas taxes per gallon are less reliable because they are based on gallons sold rather than price and do not increase by inflation while building and maintenance costs do. And owners of electric cars do not pay any taxes on gas.

“I don’t want to wait for another bridge to collapse before people start taking this seriously,” she said.

A social media campaign against delivery charges by a group of delivery companies has helped build public opposition. Lawmakers returned to their districts for the Easter weekend and Easter Sunday to voters who had been told of the proposed tariffs by opponents.

“Tell the lawmakers: There is no delivery tax. Act now!” Read a Facebook post sponsored by the Minnesota Retailers Association. Includes a link to a website nodeliverytax.comWhere a message was sent to legislators. The campaign was sent statewide but with an additional focus on metros, northern Minnesota and southern Minnesota, said Bruce Neustad, president of the association.