Border residents debate gas tax impactby Tom Weber, Minnesota Public Radio,
Dan Gunderson, Minnesota Public Radio
Minnesota's gas tax will increase by five cents a gallon this year, thanks to Monday's vote at the Capitol. The extra money will go for roads, bridges and transit. Now that the tax is going up, how will Minnesota compare with bordering states, and will the state lose any business in border communities?
St. Paul, Minn. — Right now, for every gallon of gas Minnesotans put into their tanks, 20 cents goes to the state. That will increase to 22 cents per gallon in April, and then will go up to 25.5 cents this fall.
In Wisconsin, the state gas tax is just under 33 cents a gallon, so Minnesota's will still be lower than Wisconsin. Right now, both Dakotas have a higher tax than in Minnesota, but with the increase Minnesota's state tax will be more. Finally, Iowans pay less, so they'll just keep paying less.
Officials note that the state's gas tax is just one of a number of factors that determine the price of gas. For one, a gas station owner can just decide to lower prices even if they lose their profit.
But Dennis Swanson, who runs a gas station in Moorhead, says he will have to raise his prices.
"I'm just 12 blocks from the nearest gas station in Fargo, so I expect [customers will] keep driving past me," Swanson said.
A spokesman for the North Dakota Petroleum Marketers' Association said the tax hike in Minnesota will be a "great marketing opportunity" for border stations.
We also asked some residents who live in border areas whether they might cross a state line to buy gas.
Candace Kolenda, who lives in Superior, Wis., owns a "boring station wagon and a not-so-boring Harley," and says she usually buys in Minnesota because it's cheaper here. But she says the increase might make it a little closer between the states.
LeAnna Lesmeister, of Moorhead, says corporations' actions are more important than taxes.
"If I can go to a local or regional company, or one I feel is slightly better in terms of sustainability and corporate social responsibility, then I do," she said. "As long as it's not much more expensive or far out of my way."
George Davis, in Moorhead, says he will still buy in Minnesota even with a higher tax, because he supports the gas hike and wants improved roads.
But James Rechs, another Moorhead resident, says he'll probably try to go to North Dakota as much as he can because he believes the hike "hits working families the hardest."
James Toewes, who co-founded minnesotagasprices.com, notes it's not a specific comparison to just look at each state's gas tax. He points out the actual gas in Minnesota tanks is different than the gas for sale in Iowa, for example, because each state requires a slightly different blend of the actual gas. Those different mixtures also contribute to the price of gas.
Overall, though, Toewes notes the hike will "affect station owners and consumers right near the border, but I don't think it's going to have that big of an impact."
"And you only have a certain percentage of people that actually will drive significantly out of their way to get gas at a cheaper price," Toewes added.
Jason Trout, a resident of Decorah, Iowa, wrote that politicians talk about how people will cross the border to buy gas cheaper. He calls that "poppycock."
"Who is going to spend $6 in gas and a half hour of their life to save a few cents in taxes?" he asked, before concluding, "While I commend Minnesota for raising its tax, I won't be crossing the border to show my support."
- All Things Considered, 02/26/2008, 5:54 p.m.
Tom Weber serves as co-host for MPR News' The Daily Circuit.