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County scraps wheelage tax for this year

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news Detroit Lakes, 56501

Detroit Lakes Minnesota 511 Washington Avenue 56501

Becker County commissioners opted not to pursue a $10-per-registered vehicle wheelage tax this year, but left open the possibility of implementing a sales tax of up to one-half cent to pay for transportation projects.

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At a public hearing at the County Board meeting Tuesday, Commissioners Larry Knutson, Ben Grimsley and John Okeson spoke against the wheelage tax, with Knutson calling it regressive.

“It would hurt the poor more than the sales tax,” he said.

Commissioner Barry Nelson knew a lost cause when he saw it, but asked the board to look at the issue again next year, possibly in regards to funding a new city-county public works building.

A wheelage tax would raise about $310,000 a year in Becker County. The county would have to act to implement it before an Aug. 1 deadline.

So far, 25 counties have implemented the wheelage tax, according to Becker County Highway Engineer Jim Olson. It has been used in the metro area for decades, but was recently expanded as an option for outstate counties as well, he said.

Motorcyles, ATVs, classic cars and certain other categories of vehicles are exempt. The money is collected when license tabs are renewed.

Les Ristinen, longtime president of the Becker County Taxpayers Association, spoke against the wheelage tax but in favor of the sales tax, especially if it takes some of the burden off the county property tax levy.

“I don’t see any problem with it,” he said. “Let’s get it from people who cruise through here.”

KDLM radio talk show host Jake Judd disagreed. He views the sales tax as regressive and would rather see a wheelage tax. The sales tax never seems to go away — it only grows, he said.

The full half-cent sales tax would raise up to $1.9 million in Becker County next year, according to projections from the Transportation Alliance. The county could also implement a sales tax less than the full half-cent.

The Legislature gave counties the authority to levy a sales tax, in hopes that it would reduce reliance on property taxes — but Knutson pointed out there’s no requirement that counties reduce their property tax if they impose the new sales tax.

There is a one-year levy cap that amounts to 1.77 percent in Becker County.

No immediate action was taken on the sales tax, which can be imposed at any time with a 90-day notice to the state. It will be revisited by the board later.

Roy Smith, the former county surveyor, suggested looking into raising the gravel tax, and cashing in on some of the tons of aggregate being mined in Becker County and shipped elsewhere.

Because state aid of about $2.7 million a year isn’t keeping up with higher asphalt and other construction costs of about $3.5 million, the county needs about $800,000 a year in additional funding to meet its maintenance and 20-year highway overlay schedule. That’s why the board is taking a look at the new taxes.

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