West Central Minnesota counties split on implementing new wheelage tax
WILLMAR - About half of the region's counties will implement a $10 tax on vehicles next year as a way to raise revenue for transportation needs.
During the last few weeks, county commissioners from Kandiyohi, Swift, Renville and Lac qui Parle counties voted to approve the new tax.
Commissioners from Meeker, Chippewa and Yellow Medicine counties voted against it.
That divided action of area county commissioners echoes the decisions of county boards across the state, who have until Thursday to meet the state deadline on whether or not to implement the wheelage tax in 2014.
This spring the legislature agreed to give all counties the right to implement the tax next year. Currently only the seven metro counties in the Twin Cities have the legal ability to do that.
As of late Tuesday afternoon, 46 of Minnesota's 87 counties had taken action to implement the tax, according to the Association of Minnesota Counties.
Under the plan, the state will collect that revenue when people purchase license tabs for vehicles. The state will return it to counties in monthly payments.
The general consensus from area counties is that commissioners would've preferred legislative approval of a statewide transportation funding package rather than putting the burden of levying a transportation tax on county boards.
Commissioners in Yellow Medicine County were not happy the legislature was "dumping this on the counties" and putting local commissioners in the position of adding a tax to vehicles to raise money while at the same time the state put overall levy limits on counties, said County Administrator Peg Heglund.
Yellow Medicine County Commissioners "felt it was poor business to do things this way," she said, acknowledging the county could've used the estimated $116,000 in new revenue for highway projects. "But they just didn't want to go there," said Heglund.
But some counties were willing to swallow their pride and vote to implement the tax in order to get much-needed funds to fix roads.
In Lac qui Parle County, where the measure was approved on a 3-2 vote, Auditor Jake Sieg said at least one commissioner voted against the tax on the principle that the state should be providing adequate transportation funding.
But in light of levy limits and years of decreasing state aid, Sieg said the anticipated $80,00 in annual new revenue the county will get from the wheelage tax will be used to replace dollars the county would otherwise squeeze from property taxes to fund highway projects.
The wheelage tax will help the county "find some additional revenue," said Sieg.
That same sentiment was voiced last week by the Renville County Commissioners, who voted 4-1 to adopt the wheelage tax.
Counties receive state and federal funds, including money from the state gas tax, for projects on larger roads in the county state aid highway system.
But counties also build and maintain a system of smaller county roads - many of them gravel roads - that are funded just with property tax revenues.
The wheelage tax could help counties fund work on local projects without hitting property owners again for more tax dollars.
Meeker County, which voted 3-2 against the wheelage tax, has no local county roads.
Kandiyohi County has 649 miles in its overall county road system, including 215 miles that are just county roads - most of them gravel.
The estimated $400,000 that will be generated each year in Kandiyohi County as a result of their unanimous vote in July will be dedicated for repair of county roads.
In Swift County the commissioners there also unanimously approved the wheelage tax - but just for one year. The estimated $114,000 in new revenue will be dedicated to a $150,000 project to replace road signs that don't meet reflectivity standards.
Commissioner Gary Hendrickx said he would've preferred not putting a one-year limit on the tax but said the new revenue will mean the county won't have to dip into its highway fund for the sign project.
He said it's doubtful the board will extend the wheelage tax next year but will hold out hope that the state will take action to increase transportation funding.
Hendrickx said if counties continually "clean this up for the state" they'll be continually asked to do it more and more. He said some boards have "drawn the line" and refused to implement the tax to send a message to legislators.
Heglund said the timing of requiring counties to make a decision before Aug. 1 was unfortunate because counties are only in the early stages of putting together their 2014 budgets.
"Fiscally we didn't have that clear picture yet," said Heglund. Making a decision now on the wheelage tax put counties in the position of "shooting blind."