Minnesota Trucking Industry May See Major Changesby Jana Ritter - Published: 2/20/2013
If Gov. Mark Dayton's proposed budget passes, the trucking industry in Minnesota will be looking at some sizeable changes. That is what Minnesota Trucking Association President, John Hausladen warned Tuesday as he spoke to local trucking company owners and employees. Hausladen and other MTA representatives are traveling to eight regional meetings to talk to trucking companies and make them aware of what possible changes in the proposed budget will mean for the trucking industry.
One of the changes that would come with Dayton's budget is a 5.5 percent sales tax for trucking services. That tax would be added every time a product is shipped. For example, if it's lumber, there would be a tax for trucking the raw material out of the woods and to the mill. It would be taxed again to haul it to a plant. It would be taxed yet again to haul it to the distributor, and finally, it could be taxed if it's trucked to the person purchasing the lumber to build something. Each time it is hauled somewhere, its a service, and therefore subject to be taxed the proposed 5.5 percent. That has a “huge multiplier effect,” Hausladen said. “It's hard on small businesses in Minnesota.”
As of 2012, there were over 14,550 trucking companies in Minnesota and most of them small, locally owned businesses. What would be even harder on Minnesota businesses, he further explains, would be the border cities especially losing the business to other states without the service tax. Hausladen pointed out that if Dayton's service tax proposal goes through, Minnesota will be one of only five states that have this tax. “The money could be better spent on job creation,” he said.
According to Hausladen, Minnesota trucking companies are already upset because of the costs associated with the upcoming federal changes in 2015. One of these new regulations is the logging of trucker hours and the expense of implementing the new electronic logging systems that will be required. Considering that logging has always been done manually in a book, the installation of electronic logging systems imposes a significant added expense for company owners and many in the industry also feel it's one more case of “big brother” watching over them. Federal regulations will also change the hours slightly, with mandatory breaks being instituted as well. Hausladen said this will mean less productivity and therefore a reduced income for both companies and their drivers. He explains that right now there is equilibrium between drivers and products needing to be transported. With a change in hours on the road, it would require more drivers to cover the same demand.
Another expensive change is the biodiesel law previously mandated by Minnesota in 2002. It stated that Minnesota diesel sold within the state must contain a minimum of 2 percent bio-diesel by 2005. Then in May of 2008, it increased to a B5 blend by 2009, a B10 blend by 2012, and a B20 blend in 2015. By 2015, all trucks will be required to use a B20 blend of biodiesel and Hausladen said that while the MTA supports fuel alternatives, it's also going to be another very costly change for the industry to incur.