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home : government : government May 26, 2016

8/1/2013 2:07:00 PM
Wheelage tax to apply in 2014

By Paul Martin

Goodhue County Board held an unusual extra summer meeting on July 26. Commissioners debated whether to raise one of two new possible taxes that the 2013 State Legislature made available to Counties.

The Wheelage Tax would be a flat tax of $10 on every vehicle registered in the County. Unlike the gas tax, all revenue would go to the County for local use. The State would collect it when the vehicle is licensed, then transmit it monthly to the County in which the vehicle is registered (even if the owner used an office in another county). It would not apply to motorcycles or mopeds, or to trailers and semi-trailers. It would raise an estimated $463,000 in Goodhue County in 2014.

The Sales Tax would be an extra 0.5% added to Sales Tax, as Metro counties have been allowed to do. Again, it would all be returned to the County. Revenue would be dedicated to specific transportation or transit needs. When the specified project was fully funded, it would lapse. Ongoing transit costs would be an exception. A Public Hearing would be required before it could be levied in the County. The 2014 Goodhue County estimate for the Sales Tax is $2,170,000.

Olmsted County to

Apply Sales Tax

Many Counties are thinking of applying one or the other, the Board heard. Olmsted County, faced with high development costs for the Rochester central redevelopment and other projects, has already decided to impose the extra Sales Tax. This will be in addition to Rochester's local Sales Tax.

The State needs to hear by August 1st if they need to collect the Wheelage Tax in 2014 - hence the extra meeting.

High Cost of

Highway 52 Safety

Public Works Director Greg Isakson set out the need for extra money for roads. Many County roads were paved in the 1960s and 1970s. All those roads now need major attention. The Board agreed about four years ago to bond $9.2 million for this need. However, Hwy 52 safety is a greater priority, and long-awaited projects are gobbling up available funds. These include the Hwy 24 interchange and SE Collector Road in Cannon Falls; Hwy 168 in Zumbrota; and, most recently, the Hwy 9 overpass. Other hoped-for projects will impact funds further: the planned overpass near the Covered Bridge Restaurant in Zumbrota, and a Hwy 52/Hwy7 intersection, both needed for the Zumbrota Industrial Park; and a future interchange for Hwys 52, 57 and 8.

As a result, badly needed work on other county roads has been pushed back by three years or more. Sections of Hwys 1, 2, 3, 5, 10, 11 and 12 now have the greatest need of repair.

Sales Tax : Emergency Only

Commissioners were not interested in raising the Sales Tax. They fear driving business away from the County. Commissioner Ron Allen summed it up best. "To me," he said, "the Sales Tax is an emergency option only. For example, we might look at it if an important project that leveraged federal or state money needed a local match at short notice."

Wheelage Tax : A User

Fee that is "Broad,

Simple and Fair"

Though they are always reluctant to raise taxes, they found the Wheelage Tax much more appealing. They were very clear that it would go entirely to make up gaps in the funding for County roads. Several spoke of it as a "User Fee," a very fair form of tax. "It's like the cigarette tax," said Commissioner Jim Bryant. "If you don't use, you don't pay." Board Chair Dan Rechtzigel said, "Economists apply a test to taxes: are they broad, simple and fair. This tax meets all three of those tests." Allen added that some residents he had spoken with favored the wheelage tax, because it does not throw costs back onto property owners.

Commissioner Richard Samuelson cautioned, "We need to not send the State the message that we will pick up anything they don't pay for." Commissioner Ted Seifert was not about to approve a net raise in taxes. "I can agree to this," he said, "but only if we reduce the Property Tax levy to balance it." Rechtzigel responded by telling the story of having to change a tire on a dark, windy, cold March evening after he hit a large pothole. "I said to myself, dammit, if they tax me more to pay for this road so I don't get a flat tire when it's 20°, I'm happy to pay!"

The Board voted to charge the Wheelage Tax in 2014 by four to one, Seifert voting No.

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