By J. Patrick Coolican and Ricardo Lopez

Minneapolis Star Tribune

ST. PAUL — DFL Gov. Mark Dayton offered to abandon his long-sought proposal to raise the gas tax Monday, instead recommending a steep increase in license tab fees and dipping into government coffers to pay for $600 million per year in road and bridge improvements.

“Compromise requires us to agree to things we don’t agree with,” Dayton said. “That is the only way to pass a transportation funding bill this session. Minnesotans everywhere need better highways, roads, bridges, and transit. They are telling us to ‘Get it done.’ That responsibility now falls upon all 201 legislators.”

House Republicans flatly rejected the proposals, saying it amounted to unnecessary tax increases for consumers at a time when the state is sitting on a $900 million budget surplus.

The continued disagreement on transportation, which is a top priority for Dayton as well as House Republicans and Senate DFLers, was a portentous start to the Legislature’s final week before the constitutionally-required adjournment May 23.

Legislative leaders have said a transportation deal is a linchpin of other agreements on taxes, a budget for the rest of the year and a major public works package.

Dayton actually unveiled two potential transportation compromise plans: The first included a scaled-back gas tax increase plus a hike in license fees. The other would rely solely on license tab fee increases, raising $400 million a year to create an ongoing stream of money for roads and bridges.

“We’re still concerned that with a $900 million surplus, the governor has moved from $880 million in tax increases, to $680 million in tax increases,” House Speaker Kurt Daudt, R-Crown, said after a brief meeting with Dayton and Senate Majority Leader Tom Bakk, DFL-Cook.

All sides are under enormous pressure as they consider the consequences of doing nothing when voters choose the next set of 201 lawmakers in November.

Dayton and Daudt said they would set aside work on a transportation package for the moment and try to reach agreement on other issues.

Daudt, who said he remains optimistic, said the parliamentary mechanics of herding a massive road and bridge deal and other measures through the Legislature by the deadline means the parties must have the broad outlines of an agreement by Tuesday evening.

Highlighting the deep divide late in the session, Bakk insisted that a gas tax must be part of the final agreement.

Bakk said the Senate DFL could accept Dayton’s lower gas tax proposal, but is unlikely to approve a deal with only the sharp increase in license tab fees. Doing so, he said, would require significant Republican votes.

“Democrats have demonstrated a willingness to compromise. The House [GOP] hasn’t,” said Sen. Scott Dibble, DFL-Minneapolis, who is chairman of the Senate transportation committee. He said resolution now rests entirely in the hands of House Republicans.

Dayton has insisted on some kind of ongoing funding stream to pay for roads and bridge repair, particularly as transportation advocates and officials say the state faces a multibillion-dollar backlog of urgent projects.

Dayton’s offer to do it solely through higher license tab fees would raise registration for a new $15,000 car from $198 to $265, a 34 percent increase. The cost of tabs for a new $30,000 car would go up from $385 to $509. License tab fees go down as a vehicle ages.