A 10-cent hike in Minnesota’s gasoline tax would cost an average rural Minnesotan about $60 a year. Not doing anything could cost $400 a year — $200 in car maintenance and $200 in higher property taxes.

So Minnesotans actually would save money with a higher gas tax, proffers a new report by Minnesota 2020, a progressive non-profit think tank in St. Paul.

“There’s no question that for northern Minnesota, we need additional investment in transportation,” Matt Entenza, Minnesota 2020 founder and board chairman, said Wednesday. “The quality of our roads is deteriorating on a statewide basis.”

Minnesota ranks 48th of 50 states in per capita investment in transportation, Entenza said at a Bemidji Regional Airport news conference, part of a state fly-around to release Minnesota 2020’s report, “Moving Forward: The Benefit of Transportation Investment to Minnesota’s Economy.”

“We know that transportation is crucial to attract business to northern Minnesota,” said Entenza, a former Minnesota House DFL majority leader. “For every $1 you invest in transportation, you get $8 back in additional business investment.”

While critics of a higher gas tax say Minnesotans can’t afford higher taxes, Entenza said that in reality, “when we allow our roads to deteriorate, it has clear and direct costs.”

That includes more than $200 a year for every Minnesota household in additional car maintenance as roads deteriorate, and another $200 as counties and cities are forced to raise property taxes for road projects the state can’t afford, Entenza said.

That translates into $1 billion in additional property taxes for roads and bridges as state transportation dollars decline, he said.

Republican Gov. Tim Pawlenty has twice vetoed transportation funding packages passed by the Legislature, basically saying Minnesotans are taxed too much and should not face a gas tax hike, said Conrad deFiebre, a Minnesota 2020 fellow for transportation and economic issues, and a former Star Tribune of Minneapolis government reporter.

“That rang false to me from the beginning,” he said. “The overwhelming evidence is that he’s exactly wrong — it will help our economy.”

Investments per capita in Minnesota for transportation are very small, he said, adding that while many people think a 10-cent a gallon increase in the gas tax is a lot, “based on the average car, the average driver will pay $60 a year more for a 10-cent gas increase.”

And a 10-cent hike, when figuring inflation, will only bring the gas tax to a spending level of that before the last gas tax hike — 3 cents in 1988 to the current 20 cents a gallon, he said.

“Changing it to 30 cents now would be 17 cents in 1988 dollars,” deFiebre said.

The 10-cent gas tax hike is the centerpiece of Minnesota 2020’s transportation funding recommendations, which is hoped to be taken up by the 2008 session when it convenes Feb. 12. The gas tax should also be indexed for inflation, so lawmakers don’t have to constantly revisit the issue.

The think tank also proposes raising license tab fees on new cars, allow counties to levy sales taxes for transportation uses subject to a referendum vote, and allow counties to institute wheelage taxes of at least $20 a vehicle.

“Property taxes are not a user fee, a wheelage tax is,” deFiebre said.

Many business groups support the same positions, he said, except the state’s largest business group — the Minnesota Chamber — which he says has “advocated half-heartedly for some half-measures. And then they stood aside and cheered while Pawlenty vetoed the bills passed by the Legislature.”

DeFiebre’s report cites Minnesota Chamber President David Olson’s pitch that the group’s “biggest priority” is keeping taxes from going higher.

Minnesota Chamber’s Web site lists its current support of additional transportation funds with a 5-cent a gallon gas tax increase, issuing more trunk highway bonds, state general obligation bonding, a change in the vehicle license tab fee depreciation schedule and finding up to $100 million in new operating efficiencies.

Minnesota Chamber is now preparing its priorities for the 2008 session, and deFiebre hopes it includes a 10-cent hike.

“They have said they are reconsidering their stand, and we very much hope that they will make some good steps forward,” he said.

“Increasingly, the Minnesota business community is getting on board with understanding what we need to go forward,” deFiebre said.

Minnesota 2020’s plan has the support of the state’s major association for grain elevators and feed mill industry, which depends upon good roads to ,move commodities.

“We certainly understand the need for investment in the infrastructure,” said Bob Zelenka, executive director of the Minnesota Grain and Feed Association, who traveled with Entenza and deFiebre. “From an agri-business standpoint, we’re dealing with a very inefficient system at this point in time. A lot of our roads and bridges need work.”

Restrictions on bridges hampers commodity movement, and the bridges need fixing, he said. “Without additional funding, I’m afraid it’s not getting done. We certainly like what’s being projected in this report.”

The funding proposals also drew acclaim from Beltrami County Commissioner Joe Vene, who attended the news conference.

“It’s especially painful for Beltrami County, with only 30 percent of the property on the tax rolls, and we’re wrestling with some weighty issues,” Vene said of raising property taxes for roads and bridges.

“I hope we can espouse a partnership between the metro and the rural,” Vene said, referring to the usual metro/rural split in the Legislature over funding for roads and for public transit that has prevented solid agreements in the past.

“Up in the rural here, we have people that have to move great distances — people and product,” he said. “I hope that while the vehicles are idling in the metro area, those folks down there realize that we have a real and crucial need up here in the rural area to advance our business needs in trying to move product.”

Minnesota 2020, however, isn’t weighing into the issue of how the state Department of Transportation spends its money, or of management under embattled MnDOT Commissioner and Lt. Gov. Carol Molnau.

“We don’t have a position on the commissioner, one way or the other,” Entenza said. “I personally think the governor should get the commissioners that he wants. … We intend to reach out to the Department of Transportation … They’ve had some problems, but we also have a lot of good people at MnDOT.”

Wednesday’s report is the fourth major public policy report issued by Minnesota 2020 since Entenza formed it last spring. Other reports include teacher recruitment and retention, the value of buying Minnesota-made products for the holiday season, and suggestions for a rural small business economic development plan.

The latter, Entenza argues, was picked by the Pawlenty administration and developed as its Strategic Entrepreneurial Economic Development plan for rural Minnesota.