The Sherburne County Board is considering adopting a local option sales tax to fund transportation projects.

 

Tuesday, Public Works Director Andrew Witter gave a presentation on the county’s need and the potential effects of the tax.

 

He said legislation passed in 2014 gives counties the authority to impose up to a 1/2% tax to be used for specific transportation projects or improvements, capital costs for the Safe Routes to School Program or costs for transit operations or capital improvements.

 

Currently, 17 other counties have a local option sales tax for transportation. Thirty counties have a wheelage tax - a flat fee added to license tab renewal fees. Some counties (24) have both.

 

Sherburne County has a $10 wheelage tax that brings in about $750,000 a year, which is a supplement to the annual tax levy. Witter said that doesn’t cover the county’s transportation needs, and won’t allow the county to catch up on its current and future projects. He said costs will continue to increase as growth continues.

 

Based on a University of MN Extension study, a 1/2% sales tax in Sherburne County would bring in about $3.26 million a year. About 70% ($2.34 million) would be paid by county residents.

 

The other 30% ($0.924 million) would come from non-county residents. 

 

“That may not seem real high at first, but if you consider we are able to leverage our county constituents’ money for an additional 30% of what theyre currently paying, I think that’s very beneficial for our residents,” said Witter.

 

He said as the economy and populations continues to grow, so will the sales tax revenue.

 

Witter said there are a number of benefits to a sales tax for the county’s long range transportation plan.

 

“It creates some predictability and a sustainable funding source for our transportation system well into the future, and it’s completely under the control of the county,” he said. “You start thinking about some of the federal and state dollars that we go after, they come with some other rules.”

 

Witter said his department is currently working on identifying the transportation needs and current funding sources in an effort to determine what the funding gap will be.

 

“I expect to have the gap analysis completed in early May,” he told the board.

 

The analysis and funding options will be presented to the board in May or June. Then a public meeting could be held in June or July.

 

If the board chooses, it can pass a resolution in August identifying the amount of the sales tax, projects to be funded and the term of the tax.

 

The Commissioner of Revenue must be notified by Sept. 31 and businesses and the community should be notified by Oct. 31 if the tax is to be implemented by Jan. 1, 2019.

 

Commissioner Felix Schmiesing said as long as the tax can be used for transit operations, Witter should look at including the Regional Rail levy in the discussion.

 

“Other Metro counties are paying for it with sales tax. I don’t think it’s ever been right that people in Sherburne County have a separate line on their tax statement that they’re paying for operations and utilization of NorthStar,” he said.

 

He said using part of the sales tax would be tax levy relief for the people of Sherburne County.

 

“Right now we are levying (for NorthStar) and the weight of this load is going entirely on the citizens of Sherburne County. Then they travel to other counties and bear some of their weight as well,” he said. “So I think there’s a fairness piece to this as well.”

 

Witter said he would include transit as part of the analysis.