Counties split over new taxPublished 11:18am Tuesday, July 30, 2013
ST. PAUL — Minnesota counties have until Thursday to decide whether they’ll tack a $10 charge on vehicle license tab renewals to generate money for local road projects.
The Otter Tail County Board of Commissioners decided to wait on the measure as they weigh their options between using the wheelage tax or a sales tax in order to answer the county’s need for road funding.
There’s been a sharp divide on whether to assess a wheelage tax that previously was reserved for the seven counties that make up or surround the Twin Cities. A law change this year made it an option for all 87 counties. Minnesota Public Radio News reported Monday that the boards of 40 counties have voted to collect the fee.
Backers cast it as a road user fee.
Hennepin County expects to collect $8.6 million a year from the new car and truck tab surcharge.
“It’s going to raise the quality of the road and bridge system in Hennepin County, save on property taxes (and) modernize the system,” Commissioner Peter McLaughlin said.
Other officials are resisting because they doubt it will net much new money for transportation or worry that it will lead to spending shell games.
Anoka County commissioners have voted to scrap the $5 wheelage tax previously assessed and will sacrifice $1.3 million. The Legislature said counties could charge $10 or nothing, which Anoka commissioner Scott Schulte said handcuffed counties such as his.
“Frankly, if they had left it alone at $5, this probably wouldn’t have come up and wouldn’t be an issue,” said Schulte, who voted with the majority to repeal the existing fee.
Julie Ring, a lobbyist with the Association of Minnesota Counties, said she expects some counties will use the new cash to increase transportation spending while others will mix spending hikes with property tax cuts. Ring doubts any county will simply cut what it spends already on roads and bridges by the amount the new fee brings in.