REGIONAL—Minnesota’s budget surplus for the next two years grew to $1.87 billion from November’s projection of $1 billion, thanks in large part to falling gas prices and increases in Minnesotans’ wages.

While that’s good news for the state’s economy, it could slam the brakes on a proposed increase in the state’s gas tax. Dayton and DFLers have proposed the increase as part of a package aimed to fixing Minnesota’s crumbling roads and bridges.

Minnesota Depart-ment of Transportation statistics show more than 65 percent of the state’s roads and 40 percent of its bridges will be more than 50 years old by 2025. Over the same time frame, freight semi-truck traffic is projected to rise by 30 percent, and the state will have 430,000 additional residents.

MnDOT officials say the state needs $6 billion over 10 years for the state’s roads, with most of that money going to modernizing existing roads, but some of it also going to new projects.

“I started the session with the belief that any new revenue for transportation was going to be really difficult in the House,” said state Rep. Tom Anzelc, DFL-Balsam Township. “Republicans are not interested in any tax increases of any kind.”

Anzelc said the additional revenue in the latest budget forecast “really strengthens the position by Republicans in the House that they don’t need to raise any kind of tax.”

“I think they’ll cobble together enough revenue from enough sources to do a pretty significant one-time funding package for roads and bridges,” he continued.

State Rep. David Dill, DFL-Crane Lake, said the Republicans’ plan for funding transportation needs is “light years away” from Gov. Mark Dayton’s proposal, but acknowledged it may be the solution that will get legislators out by the session’s deadline.

“However, it doesn’t solve the long-term problem,” said Dill, who is undecided on whether a gas tax increase should be included in the funding package for transportation. If it is, he said, he favors establishing a cap on the tax so it doesn’t put gas out of reach for people as prices rise.

Judging by the emails that he has received, Dill said he estimates about 80 percent of his district opposes any gas tax increase. “But people also want to see roads and bridges repaired,” he said. “Sometimes you have to make a decision on behalf of your constituents even if it is unpopular.”

Dill said although the number touted in news reports is $1.87 billion, when adjusted for inflation, the actual additional dollars are between $800 million to $900 million.

Instead of spending all the additional revenue, Dill would like to see $450 million diverted to the state’s rainy day fund to prevent future budget fiascos, which were the hallmark of Gov. Tim Pawlenty’s administration.

The Legislature will need to set priorities on whatever additional spending it approves, Dill said. He said some of the concerns he expects to rise to the top include nursing homes, where pay for certified nursing home assistants and state reimbursement rates lag in rural communities.

Anzelc also cited nursing home reimbursements and pay, as well as funding for Early Childhood and public education as key concerns.

Gov. Dayton has proposed spending $442 more on higher education and universal pre-K. Republicans are pushing for tax cuts of at least $900 million.

Dill said it’s still early in the process of determining what to do with the surplus.

“We just got the latest forecast on Feb. 27 so the spending bills are just starting to take shape,” he said.