Goodhue County approves wheelage tax starting in 2014
RED WING - Goodhue County Board approved a $10-per-vehicle wheelage tax starting in 2014. The estimated revenue in the first year is $463,000.
The 4-1 vote came Friday morning after a Committee of the Whole discussion on the merits of a wheelage tax and how to spend the generated funds.
County commissioners discussed using the tax to pay down debt from existing road projects, fund new improvements or split it between the two.
The county has until the end of the year before a decision needs to be made.
"I can see paying off our debts," Commissioner Ron Allen said, alluding to several major commitments made by the county in recent months to safety projects along Highway 52.
"Instead of having the taxpayers pay for (those projects), it should be the people who use the roads," Allen said. "Then we can try to keep property taxes low."
But Commissioner Ted Seifert, who provided the only dissenting vote to the motion, said the wheelage tax constitutes an overall tax increase for county residents.
"I can support the wheelage tax if it was offset by a reduction in property taxes," Seifert said. "I like user taxes, but in the way it's presented here, it's simply a tax increase."
Seifert added Goodhue County taxpayers will already be paying more taxes resulting from the new state budget and Obamacare.
Seifert also said he didn't like how open ended the new tax seems.
"There's no end to it," Seifert said. "Now, without ever voting again, this wheelage tax will be there forever and ever and ever."
Without the wheelage tax, the county would have to approve additional bond revenue or increase local levy taxes to pay for needed road improvement projects, Public Works Director Greg Isakson said.
He said that diverting county construction funds to projects like the interchanges at Highway 52 and county roads 24 and 9 has pushed back maintenance and repaving work.
"We can use a few more dollars for roads," Commission Richard Samuelson said. "It will be put to good use."
Samuelson made comments earlier in the month about the difficulty the county has faced trying to secure funding for road projects. He said the wheelage tax should make it easier to pay for needed safety improvements in the future.
Minnesota legislators voted to expand the wheelage tax beyond Metro counties earlier this year, allowing all county governments to impose the tax if they wished.
As opposed to similar user fees like the state gas tax - which splits revenue between state, county and city governments - all of the money generated by the wheelage tax goes to the county, Isakson said.
The tax will be collected by the Minnesota Department of Public Safety's Driver and Vehicle Services division, and then doled out to county governments each month.
County Board also discussed the possibility of imposing a local sales tax and $20-per-vehicle excise tax to help pay for future transportation projects, which could raise more than $2 million next year. But commissioners agreed not to pursue that option.
"Nobody is interested in a local sales tax," Allen said. "We'll keep that for emergencies in case something big comes up."