Commissioners look at enacting Wheelage Tax
Tuesday, June 25, 2013 7:51 AM
Houston County may soon impose a $10 wheelage tax on vehicle registrations in order to raise money for highway purposes.
At the June 18 meeting of the board, county commissioners voted to hold a public hearing on the matter on Tuesday, July 16, at 10 a.m.
According to documents provided by the Association of Minnesota Counties (AMC), the county board can now levy the fee on all eligible vehicles by resolution.
That includes those stored permanently in the county by nonresidents. For example, a vehicle stored at a cabin would pay the additional fee to Houston County, even if the owner's home county has its own wheelage tax.
In order to do that, vehicle owners will be asked to identify the county where the vehicle is kept during the renewal process.
Some vehicles are not subject to the tax including motorcycles, mopeds, trailers and semitrailers, and vehicles not subject to annual registration such as collector vehicles, tax exempt and state-owned vehicles.
AMC estimates that Houston County would collect $198,000 yearly with the tax. County commissioners cannot elect to set the fee any higher or lower, and may choose to have the county collect the tax directly or have the state collect it as part of the tab renewal process.
The state would need to be notified by Aug. 1, 2013, to begin collecting the fee on Jan. 1, 2014.
Beginning in 2018, the cap will be raised to $20 per vehicle, and counties will have the right to set the amount anywhere up to that point.
County Engineer Brian Pogodzinski said, "Since the county already supplements the maintenance side of the Highway Department with pavement striping and seal coating, those types of expenses, so this money is already being spent. You could use this to offset some of that (property tax) levy if you wanted to."
"They're anticipating that a large majority of the counties are going to enact a wheelage tax this year," Pogodzinski stated.
Since 2006, five metro counties have been allowed to impose the tax, according to reports cited by commissioner Teresa Walter.
"It's a user tax," Walter said.
Pogodzinski agreed, "It's a user fee or user tax, so it's a shift from using property taxes to supplement Highway Department costs. Some of the counties have gone to this since recent ag (agricultural) values have raised taxes so much on farmers. It's more of a uniform hit on all roadway users."
In other Highway Department news, low-bidder Minnowa Construction beat out three other contractors to replace a bridge on South Prairie Road.
The cost was $359,933, and the vote to approve unanimous. Pogodzinski said the engineer's estimate for the project was $411,749.
Commissioners also awarded a pavement-marking contract to low-bidder AAA Striping Services of St. Michael. The company will provide fog lines and centerlines on various county highways for $93,293. There were two bidders.
Pogodzinski said the county only budgeted $80,000 for the work, but said, "I'm not asking for any additional moneys. We'll make some adjustments in order to complete the project."
Finally, commissioner Steve Schuldt reported that an inspection of the Roverud Construction facility on June 13 by the Minnesota Counties Intergovernmental Trust (MCIT) yielded some minor concerns, but no "red flags" that would eliminate the possible purchase of the building for county highway department use.
MCIT provides insurance coverage to Houston County.