House Tax Committee advances broad tax package that freezes gas-indexing, repeals delivery fee and reallocates transportation funds

The House Tax Committee on Wednesday advanced House File 5, a sweeping tax-and-transportation package authored by Representative Joy, voting 12-11 to send the bill as amended to the Transportation Committee.

The measure, as amended by the A13 amendment adopted on a 12-11 roll call, would repeal the retail delivery fee, freeze the automatic gas-tax indexing, double an electric-vehicle registration surcharge and change the distribution formula for the Transportation Advancement Account (TAA). The A13 amendment also redirects a one-time general-fund contribution originally allocated to the Metropolitan Council’s Blue Line project and alters allocations that supporters say will backfill lost delivery-fee revenue. Opponents said the changes would cut transit operating resources, reduce funding for senior nutrition programs, and shift money away from the seven-county Twin Cities region.

Why it matters: HF5 touches major revenue streams used for roads, transit and local aid. The committee debate focused on who benefits from eliminating the delivery fee and how to backfill the revenue — by redirecting sales-tax and other sources — and on the bill’s distributional effects for metro-area transit, small cities and social programs such as Meals on Wheels.

What the bill does…