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Our Opinion: New sales tax is a smart move

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opinion Detroit Lakes, 56501
Detroit Lakes Minnesota 511 Washington Avenue 56501

Becker County was wise to impose a half-cent sales tax to help pay for transportation projects.

A resolution to adopt the new Safe, Multi-Modal, Active, Responsible Transportation (SMART) tax was unanimously approved by the Becker County Board last month.

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Starting in July, the half-cent sales tax will be collected by local retailers along with the state sales tax.

The new sales tax will raise about $2 million a year, and will be used for county, city and township transportation projects.

Counties won the right to levy a sales tax through legislative action last year.

The county highway system badly needs the funding boost — state funding has fallen well short of what is needed to resurface and maintain its 450 miles of paved roads and 225 miles of gravel roads.

Those roads are resurfaced or rebuilt on a five-year plan, through funding that last year included $2.7 million in state aid, $600,000 from the county tax levy and about $200,000 in federal funds.

The County Board has been kicking in extra property tax dollars to help maintain the roads, but the overall funding has still not been enough to maintain a 50-year life cycle on its paved roads — including construction and two overlays over that space of time.

Why should property tax payers shoulder the whole burden of maintaining the county highway  system? An estimated 40 percent of money raised through the new sales tax will come from visitors that use the county highway system but live outside Becker County.

It’s more expensive to rebuild a crumbling highway from the ground up than to resurface it, and it’s cost-effective to stay ahead of the maintenance curve — if the money can be found to do the work when it needs to be done.

But with higher costs for petroleum-based asphalt and other things, road construction is getting more expensive: In 2003, the county paid $73,000 a mile for resurfacing work, while last year it paid $171,000 per mile — a significant cost hike.

The county needs about $3.5 million a year to keep up with highway resurfacing and reconstruction work.

Though up to $20 million in road projects have been identified as meeting the preliminary SMART guidelines, the county is starting with $860,000 in projects for Phase I of the program — projects that are slated to begin construction this year.

Becker County has looked at several options in recent years to beef up its highway budget and keep maintenance projects on track:

It has considered taking advantage of low interest rates to issue bonds for highway projects, as neighboring Clay County has done.

It considered, without much enthusiasm, a “wheelage tax,” that would come from tacking an extra $10 on license plate tab renewals and would raise about $314,000.

Becker County has an excellent bond rating and that will only improve — rating agencies look favorably on government units that base revenue projections on a solid source such as the sales tax.

With a revenue source that taps a wide array of highway users, the sales tax investment in highways, bridges and trails will pay off handsomely for Becker County down the road.

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