Do roads matter? — Our view: Local-option sales tax deserves consideration

In the late-1990s, the Minnesota Legislature granted Minnesota’s 87 counties the opportunity to impose an additional sales tax upon themselves to pay for transportation or transit.
One could argue the measure was the legislature’s way of granting a potential funding mechanism to counties with a greater demand for transportation projects than the state could not, or would not, deliver. In its wisdom, the legislature’s creation of a local-option sales tax allowed county commissioners across the state to OK a slight sales tax increase without a public referendum.
McLeod County commissioners recently rescinded the wheelage tax county vehicle owners pay after informally discussing the potential of implementing a ¼- or ½-percent local option sales tax. We applaud the county board for thinking about taking advantage of a tool the state created. It can create a win-win for the county and the motoring public.
First of all, a $10 wheelage tax generated $385,000 for transportation maintenance in McLeod County. While that’s a significant amount of money, it’s not nearly enough to keep track with the county’s under-funded transportation needs. Owners of vehicles residing in McLeod County pay the wheelage tax, yet the work it funded benefitted everyone driving on county roads, regardless of their zip code.
The local option sales tax is a far more equitable tool. The additional sales tax will be paid by anyone who purchases a taxable item the county includes on its list of taxable items impacted by the tax. It is used by 71 of the county’s 87 counties. Big-ticket items, like cars and agricultural implements – may be excluded if commissioners so choose. The money from the tax hike will help fund road projects motorists – county residents or not – use every day.
The local option sales tax revenue is intended to fund specific projects. When the projects are funded, the tax can be sunset, or the county can create new projects and continue invoking the tax.
The tax revenue could also help leverage additional revenue from the state and federal governments.
The additional ½-percent will add a nickel to the cost of a $10 purchase, an extra 50 cents to a $100 purchase. Are we going to balk at a tool that will help transform pocket change into local funding for local road improvements? We hope not.
Time is not necessarily on McLeod County’s side. Commissioners eliminated the wheelage tax without enacting a replacement. The wheelage tax goes away Jan. 1, 2020. The county board needs to decide if it has the stomach for a local-option sales tax. If not, fill the $385,000 gap it created by eliminating the wheelage tax.
While nobody likes paying taxes, most everyone wants something from government. A system of good roads is high on the list of things the government funds. We all benefit from a system of good roads. Roads are expensive, and the local option sales tax is a way to expand the field of people who pay for it and the revenue for projects.
At the end of the day, the county board must decide how to best fund roads people want.
-jm