Kandiyohi County Commissioners consider wheelage tax
WILLMAR - The Kandiyohi County Commissioners have until the end of the month to decide if they will take action to implement a $10 wheelage tax in 2014 on most vehicles registered in the county.
If approved, the tax would generate nearly $400,000 that could be used for county road construction projects.
During a road and bridge meeting Monday, the commissioners said they are considering the option but want to hear feedback from constituents before making a decision.
The issue will be decided during the County Board of Commissioners' July 16 meeting, said Chairman Harlan Madsen.
The combination of steadily increasing construction costs and flat-lined revenues has meant the county has pushed long-overdue projects down the list for years.
Madsen said he had hoped the Legislature would approve a comprehensive transportation bill this year to address funding for road construction projects that would not rely just on raising local property taxes.
"It was a bust," said Madsen.
But the Legislature did give counties a new tool for raising funds through a maximum wheelage tax of $10 per vehicle. The fee does not apply to certain vehicles, such as motorcycles, recreational vehicles, trailers, collector vehicles and tax-exempt vehicles.
In 2018 the tax can be increased to $20 per vehicle.
"We need to find money someplace," said Public Works Director Gary Danielson, adding that he would like to have funds for road projects without raising property taxes.
If the board moves forward with the county wheelage tax, the state would collect the tax and return the funds to the county.
Madsen said at least a half-dozen counties have already taken action to implement the fee and more will be voting during their meetings this week.
Madsen acknowledged that "a tax is a tax," but said the wheelage tax would be more of a users' fee. He said it's not as regressive as property tax and "stands a lot of merit" as a funding option.
Commissioner Dean Shuck said allowing counties to implement a wheelage tax took legislators "off the hook" for failing to pass a comprehensive transportation bill.
The burden of deciding whether or not to implement a transportation tax is now in the hands of county commissioners all across the state.
County Administrator Larry Kleindl said it's important the public is aware that the commissioners are considering the new tax and have time to express their opinion before a vote is taken.
If the tax is approved, Danielson said he would recommend the revenue be earmarked just for county roads that are not eligible for state aid.
That system would let taxpayers know exactly what the wheelage tax is buying, said Madsen.
Danielson said there are no "strings" attached to how or when the funds are spent, as long as it's dedicated to transportation.
The Legislature is also allowing counties to implement a half-percent local option sales tax for transportation.
If such a tax was implemented in Kandiyohi County, it would generate approximately $3.7 million in 2014.
While the commissioners said they intend to keep every funding option on the table, there does not appear to be support for implementing a countywide sales tax to fund road projects.
Because the interest rates on bonds have tripled in the last couple months, the commissioners are also not considering bonding as a likely option for financing road projects.
Kleindl said bonds are "not totally off the table" but would not be a viable tool to use right now. In 2016 the county will have paid off bonds for the Health and Human Services Building, which could provide an opportunity for transportation bonding.
In other action Monday:
*The board agreed that landowners who violate rules about buffer strips along drainage ditches will have to pay all costs associated to repair the strips, including reseeding land to grass. A foot buffer strip that's required on some ditches is planted to grass by the county. But some farmers have planted crops in the buffer zone and sprayed herbicide that has killed the grass, in violation of state law. The commissioners said landowners were well-informed about the requirements and are responsible for not destroying the buffer strip, even if the fieldwork is being done by an employee or renter.
*The board took a road tour, including county roads that go near or through county parks on Games Lake and Diamond Lake. The commissioners are looking at options for moving the roads to improve safety at the parks.