Kandiyohi County’s new wheelage tax rolled out without an issue
WILLMAR — There was a steady line of customers Thursday at the licensing bureau in Kandiyohi County, but there were no problems reported during the inaugural day of the county’s $10 per vehicle wheelage tax.
“It seems like people are very aware of it,” said Deb Mickle, supervisor for the Kandiyohi County License Bureau. “They’re not even asking what that extra $10 is for.”
The Kandiyohi County Board of Commissioners voted this summer to implement the wheelage tax Jan. 1 as a means of raising revenue for county road construction projects.
During the last session, the state Legislature gave counties the authority to decide whether or not to institute the wheelage tax.
About half of the counties did so, with about 73 percent of Minnesotans now subject to the wheelage tax, according to the Association of Minnesota Counties.
In west central Minnesota, Kandiyohi, Swift, Renville and Lac qui Parle counties added the wheelage tax to the list of vehicle fees.
The county boards in Meeker, Chippewa and Yellow Medicine counties voted against the tax.
The money will be collected only on vehicles that are registered in counties that established the tax.
People from Meeker, Chippewa and Yellow Medicine counties will not be charged the wheelage tax if they get license tabs in Kandiyohi County.
Likewise, Kandiyohi County residents won’t avoid the tax if they go to a county that doesn’t have the wheelage tax.
Counties send all license tab fees to the state, which then separates the wheelage tax revenue and returns the payments to the appropriate counties.
Kandiyohi County Administrator Larry Kleindl said he expects the revenue will come to counties in one annual lump sum payment.
Based on existing vehicle data, Kandiyohi County expects to generate nearly $400,000 in new revenue that will be used to improve safety on county roads that have no additional state or federal funding sources.
Lac qui Parle County will generate about $80,000 each year to use for road projects and Swift County expects to get $114,000, which will be dedicated to a project to replace road signs that do not meet reflectivity standards
“We appreciate the opportunity to make some local decisions,” said Kleindl.
Under the state law, money raised from the wheelage tax must be deposited into a county road and bridge fund and be used for transportation projects.
Some vehicles are exempt from the wheelage tax including motorcycles, mopeds, trailers, semitrailers, all-terrain vehicles, collector vehicles, and tax-exempt and state-owned vehicles.
Counties can vote by Aug. 1 of each year whether to implement or rescind the wheelage tax.
In 2017 the cap on the wheelage tax will go to $20 per vehicle.
While the added revenue will help address deficient road funding, Kleindl said it may not be enough to offset anticipated high construction costs that are being linked to the North Dakota oil boom. A number of west central Minnesota construction companies have moved workers west, resulting in a high demand for their work back home. Early indications are that road construction costs will be much higher than last year.