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Kandiyohi County board eyes sales tax

WILLMAR -- Kandiyohi County may consider a local option sales tax as a mechanism to help pay for much needed improvements in the county road and bridge system.Although discussion is still in the early stages, the idea is getting an earnest look f...

WILLMAR - Kandiyohi County may consider a local option sales tax as a mechanism to help pay for much needed improvements in the county road and bridge system.
Although discussion is still in the early stages, the idea is getting an earnest look from the County Board of Commissioners. In the past 10 days the commissioners have talked twice about the possibility of a sales tax - first at a county road and bridge meeting last week and again in a formal discussion Tuesday at the regular meeting of the County Board.
“You don’t have to do it but it’s an option for you,” said Larry Kleindl, county administrator.
Minnesota counties were given the authority a couple of years ago to enact a local option sales tax to fund transportation or transit projects. The tax rate is allowed to be set between 0.1 percent and 0.5 percent. The money must be used for specific road projects, excluding maintenance, and can only be collected until the projects are paid for.
Public hearings also are required for each project.
Current funding cannot keep up with the county’s ongoing transportation needs, said Mel Odens, director of public works.
“Right now we’re maintaining the system,” he said. But as the county’s highways and bridges continue to age, the backlog of roads in need of reconstruction will keep growing, he said.
Of 21 bridges in the county, seven need replacing and two are in critical need of attention, Odens said. About 100 miles of the county road system are 50 years old or more, he said.
The county relies on three main sources of highway funding: state aid dollars, the county construction levy and a wheelage tax. In 2015 these three funding sources accounted for just over $6 million in road construction funds for Kandiyohi County. The amount needed to properly maintain the system was $8.6 million, however, and the amount needed to meet all the county’s road construction goals for the year was $10.4 million.
“What we do know is we have a gap,” Odens said.
A local option sales tax of 0.1 percent would yield an estimated $528,638. A 0.5 percent sales tax would generate $2.6 million for earmarked road projects.
County officials said several Minnesota counties already have a local sales tax in place for road projects. Among them are a handful of counties with regional centers - Detroit Lakes, Duluth, Fergus Falls, Mankato, Marshall and Rochester.
“A lot of counties around us are in the same conversations we are,” Kleindl said.
The consensus Tuesday from the county commissioners was that if additional money is to be sought from the public for improving roads, a sales tax is preferable to the property tax.
It’s “as close as you can get” to a user fee, said Doug Reese.
“How long do we wait for the state to have long-term dedicated funding for our roads and bridges, and when is the time for us to consider doing something ourselves?” he said.
“If we do nothing, our infrastructure will crumble,” said Jim Butterfield, chairman of the County Board.
Harlan Madsen said he holds little hope the Legislature will find a solution to the state’s ongoing shortage of transportation funding.
“I’ve been promised that as a commissioner for 22 years,” he said. “It just has not happened.”
County officials said their discussion of a local option sales tax is one of several ways they are trying to address local needs. The wheelage tax brings in about $400,000 a year. A tax on aggregate materials brings in another $50,000, primarily for maintenance. The county also is looking at a jurisdictional realignment that would give some roads back to the townships in which they are located.
Although an advance on state aid dollars is a possibility, it’s not a long-term solution to funding the needs of the county road and bridge system, Odens said. “All you get is next year’s money.”
Federal dollars also are awarded competitively, with no guarantee that Kandiyohi County would receive any of the funds it applies for, he said.
County officials said Tuesday that they want to hear what the public thinks about a local option sales tax for roads.
It will be important for county residents to understand the need, said Commissioner Rollie Nissen.
“Everybody that uses the roads should have a dog in the hunt,” he said.

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