Sizeable changes may come to Minnesota's trucking industry
If Gov. Mark Dayton's proposed budget passes, the trucking industry in Minnesota will be looking at some sizeable changes.
Minnesota Trucking Association President John Hausladen spoke to area trucking company owners and staff in Detroit Lakes last Tuesday, telling them what the proposed budget will mean for the trucking industry, and getting feedback on their concerns.
"We want to reach out to businesses and understand their needs," he said after the meeting.
Hausladen and other MTA representatives are traveling to eight regional meetings through March 8 to talk to trucking companies and make them aware of possible and certain changes.
Along with lobbying for truckers, MTA also provides safety training for truckers and companies, supplies them with any resources and materials they may need and more.
"We help them be safe and we help them be successful," he said.
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 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.
This is because each time it is hauled somewhere, it is a service, and therefore would be taxed the proposed 5.5 percent. That has a "huge multiplier effect," Hausladen said. "It's hard on small businesses in Minnesota."
What would be even harder on Minnesota businesses, he said, would be the fact that especially border cities would possibly lose the business to other states without the service tax.
"The money could be better spent on job creation," he said.
According to MTA, in 2011, the trucking industry provided 120,980 jobs, and the total wages paid that same year exceeded $5.6 billion.
In 2012, there were over 14,550 trucking companies in Minnesota, most of them small, locally owned businesses.
In 2009, the trucking industry in Minnesota paid approximately $680 million in federal and state roadway taxes and fees.
If Dayton's service tax proposal goes through, Hausladen said Minnesota will be one of only five states that have this tax.
A federal change that is coming in 2015 is the logging of trucker hours. While hours were logged manually in a book in the past, they will now be logged electronically. Hausladen said that has companies upset because of the cost to install the system and because it's one more case of "big brother" watching over them.
There will also be a change to the amount of hours truckers can drive. Now, truckers are allowed 14 hours on duty, with 11 of those hours actually driving.
As of July though, those hours will change a bit and mandatory breaks will be instituted.
Hausladen said that will mean less productivity and therefore a reduction in income for the driver and reduction in income for the company.
Right now, he said, there is equilibrium between drivers and products needed to be transported. With a change in hours on the road though, that would change and there would need to be more drivers to cover the demand.
By 2015, all trucks will be required to use a B20 blend of biodiesel. A 2002 law mandated that Minnesota diesel sold within the state contain a minimum of 2 percent bio-diesel by 2005. Then in May of 2008, that mandate was increased to a B5 blend in 2009, a B10 blend in 2012, and a B20 blend in 2015.
Hausladen said that while the MTA supports fuel alternatives, it's also very expensive.
Overall, he said, the trucking industry in Minnesota is healthy.
"We just want to keep them successful," he said of the trucking companies.