Counties consider new tax to pay for roadsThe Polk County Board is considering and likely will pass Minnesota’s wheelage tax, Commissioner Warren Strandell said.
By: John Myers and Ryan Bakken, Forum News Service
The Polk County Board is considering and likely will pass Minnesota’s wheelage tax, Commissioner Warren Strandell said.
“I think there’s a good chance that most of the counties in the northwestern corner will go with it, but I don’t believe anyone has taken that option yet,” said Strandell, of East Grand Forks.
Polk, along with other Minnesota counties, is considering charging drivers a $10 wheelage tax per vehicle to boost county road construction projects.
The county has 48,000 registered vehicles. After subtracting the vehicles that are granted exceptions, a $10 tax would give Polk an additional $300,000 a year to improve roads.
Until now, only Twin Cities metro counties had the authority to levy a $5 wheelage tax. Only Anoka, Carver, Dakota, Scott and Washington counties have actually charged their drivers.
But county commissioners across the state are now mulling the idea to help fill their coffers after the 2013 Minnesota Legislature expanded the option to all 87 counties, up to $10 per car or truck.
The new county taxes could not take effect until 2014 registrations.
Brown, Mower and Rice counties already have approved the new tax, said Julie Ring, legislative coordinator for the Association of Minnesota Counties. Hennepin County will hold a public hearing on the tax Tuesday with commissioners there set to vote in mid-July. Counties have to decide by Aug. 1 if they want to charge the tax in 2014. Otherwise, they’ll have to wait another year.
“I think most of the counties up here are waiting for someone else to take the lead,” Strandell said.
While the state already gives each county a share of gas tax money to repair major roads, called County State Aid Highways, many miles of lesser-traveled county roads don’t qualify. Those roads have to be repaired with money from county property taxes.
The wheelage tax gives the county flexibility because it can be used on any county road. The gas tax dollars that counties receive can only be used on county state aid highways, Strandell said.
With gasoline taxes shrinking due to better-mileage vehicles and fewer miles driven, highway experts say other sources of revenue will be needed to maintain roads, bridges and highways across the nation. Options such as a per-vehicle tax are considered more equitable than general taxes because they are paid by drivers who use the roads. Residents who don’t drive don’t pay. Those with more vehicles pay more.
The Minnesota Department of Public Safety’s Driver and Vehicle Services Division collects wheelage tax on behalf of counties, paid at the time of vehicle registration. The money is doled out to each county and, by statute, must be used for road repairs.
The wheelage tax is paid based on where the vehicle is ordinarily stored or parked during non-business hours or when not in use. The tax is applied to most cars and trucks but not motorcycles, mopeds, trailers, boat trailers, collector cars or ATVs.
Sales tax option
Meanwhile, all 87 counties have a new option, also offered by the 2013 Legislature, to impose a sales tax on all retail sales of a half-cent per $1 to help pay for transportation and transit projects.
The option had been there before, Ring said, but lawmakers have now removed the need for any referendum.
“I’m not aware of any counties that have approved the local sales tax as yet,” Ring said. “But there’s less of a time stamp on that. That can happen at any time of the year.”
Estimated annual revenue for counties from $10 wheelage tax:
St. Louis: $1,688,000