The public will have the opportunity to weigh in on whether Crow Wing County should adopt a sales tax to fund road and bridge improvements.
The county board Tuesday scheduled a public hearing on a potential local option sales tax for Nov. 24.
County Engineer Tim Bray told the county board in September the highway department is facing increasing difficulties in keeping up with road maintenance, particularly under a zero or negative levy expectation. Bray said more than 15 percent of all paved county roads are in poor or very poor condition, three times higher than internal performance targets call for. More roads will reach this threshold, Bray said, as maintenance continues to be deferred on an average of 159 miles of pavement each year.
The projected annual revenue from a half-cent local option sales tax under consideration would be $4.18 million, enough to potentially eliminate the $1.3 million portion of the property tax levy used to fund highway projects.
A study conducted in coordination with the University of Minnesota Extension office found 51 percent of the revenues generated from the tax would be contributed by visitors to the county. For permanent residents, the study found a sales tax would not drive people to shop somewhere outside the county. Bray said with an estimated $10-$15,000 spent each year on taxable items, a household could expect to spend an additional $50-$75 annually.
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"I am adamantly opposed to this, but I still think that discussion is good on anything," Chairman Paul Koering said Tuesday.
Koering said he is protective of people's tax dollars, and he is concerned that should the tax be approved and someday the property tax levy goes up as well, there's an extra tax on county residents.
Commissioner Paul Thiede said he recognized benefits to such a tax given the lack of state and federal funding for many county roads. He added the tax could be removed in the future should the need no longer exist.
"If we pass this, put it in place, and three years down the road the economy is churning along greatly, we could choose to blink it off," Thiede said. "This is not the usual place that I find myself in supporting this, but I think the galaxies are aligning here in a lot of different ways."
Commissioner Rachel Reabe Nystrom asked whether the issue could go on a ballot for county voters to decide. Bray said a 2013 law passed by the state Legislature eliminated the requirement for such an issue to appear on the ballot, although the option still exists.
If the county board elected to place the issue on the ballot, commissioners indicated they would prefer it be during an election year to avoid additional costs for including the question-an option that would push out the possibility of a tax for another year.
Koering asked County Administrator Tim Houle to provide his insight on the issue.
"What it boils down to is, are you satisfied with the pace of the improvements that we can make to the county road system, giving the existing funding stream?" Houle said. "If the answer to that is no, than you should consider alternatives."
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"My answer is no, but I don't want any more taxes," Koering said.
Bray asked the county board for direction on how much of the portion of county levy dollars allocated to the highway department they expected to eliminate. To prepare for the public hearing, Bray said he needed to have an idea of this, so he could present a plan for what road improvement projects a sales tax would support.
The county board directed Bray to present three alternatives: one with all of the highway department's levy dollars eliminated, one where 50 percent of that portion were eliminated and one where levy dollars remained intact.
Bray's own analysis of the financial impact, presented in September, found Crow Wing County could eliminate maintenance deferments by 2026 with the adoption of a half-cent tax. Should the tax be adopted and the levy dollars eliminated, Bray said it would add four years to this estimate.
Last week, the Cass County Board set its own public hearing on the matter after its county engineer also expressed trouble keeping up with road maintenance. Data provided by Bray in September showed 16 counties in greater Minnesota utilize a sales tax for this purpose.
CHELSEY PERKINS may be reached at 218-855-5874 or chelsey.perkins@brainerddispatch.com . Follow on Twitter at www.twitter.com/DispatchChelsey .
