Crow Wing County considering half-cent sales tax to fund road projects
About a dozen people attended a public hearing Tuesday, Nov. 24, at the Crow Wing County Courthouse in Brainerd to learn more about a proposed countywide half-cent sales tax to help raise an estimated $4.18 million annually to fund transportation projects.
Non-residents would pay an estimated 51 percent of those funds.
Those attending the public hearing included Steve Roe, Crosslake mayor; Jon Lubke, Jenkins mayor; Mike Dubay, Jenkins Township supervisor; Ross Krautkremer, Nisswa City Council member; Mark Hallan with Widseth Smith Nolting, Nisswa city engineer; Shawn Hansen, Nisswa Chamber of Commerce CEO/executive director; Darrel Olson, Baxter mayor; Mary Koep, Brainerd City Council member; and Matt Kilian, Brainerd Lakes Chamber of Commerce president.
Tim Bray, county highway engineer, gave a presentation about the proposed half-cent sales tax that would be applied to most regular taxable items. Crow Wing County is experiencing a $4,356,000 annual gap in transportation funding. Deterioration of the county highway system continues to outpace levels of funding received from traditional sources. This gap causes the delay of over 150 miles of improvements each year.
Those attending the public hearing had a chance to speak, as did board members. The issue will be on the board's Tuesday, Dec. 15, agenda, at which time board members are expected to decide whether to implement the tax.
If implemented, the soonest the tax could go into effect would be April 1, 2016.
Dubay asked commissioners not to enact the tax.
"This tax has implications on businesses," he said. "The past few years have been difficult for businesses to operate and grow. Several have closed. Unoccupied rental space exists. All of our brick and mortar businesses are facing increased competition from the enormous growth of online sales."
Besides affecting businesses and the unemployed, Dubay said retired people on fixed incomes would be affected.
He advocated that the board pause, prioritize, analyze costs, delay projects and investigate alternatives or other affordability options before enacting the tax.
"As a township officer, we have to delay improvements, deny new roads, all with a budget with no levy increase," he said. "This is not the right time to implement a new county tax. A sales tax can be progressive."
Lubke said he believed a half-cent sales tax was fairer than a property tax increase.
"We need safer roads. We need them," he said, noting a fair way to raise money was by taxing non-residents as well as residents.
Koep also spoke against the tax, and Kilian asked the board to use the chamber as a conduit into the business community.
In explaining the tax, Bray said 16-18 counties have imposed or are looking to enact the sales tax, and all are pursuing the full half-cent allowed. Funds couldn't be used to plow snow, buy fuel or keep the lights on at the highway department, Bray said. Instead, the tax is intended for road maintenance projects.
The following would be exempt from the tax: motor vehicles registered for road use, including cars, trucks, motorcycles and motor homes, boat trailers and camper trailers.
Non-exempt items include car leases and rentals, boats and all-terrain vehicles.
State law allows the tax to be collected until projects are done. Bray is proposing a 10-year sales tax duration.
"This path is a 10- to 15-year path to get rid of deferments so we pave when we say we will," Bray said, noting a perpetual sales tax is not palatable to anyone in the room. The county board determines how long the tax is in effect, and Bray said his department chose 10 years to conquer the projects that will need to be done.
Bray outlined internal and external challenges to implementing the tax. Internal challenges included having enough staff for construction projects. External challenges included the impact on families and businesses.
"We are expecting about $75 per year will actually be spent per Crow Wing County household," he said.
A reason to enact the tax is to fix pavement quality that has been deteriorating for years, Bray said, noting road projects continue to be deferred because of lack of funds.
With current funding levels, Crow Wing County is deferring over 150 miles of pavement preservation per year, he said. Current funding allows about 22 miles of paving per year, and the county needs to do about 13 more miles per year to catch up, he said.