Moose Lake Star Gazette - Serving Carlton and Pine Counties Since 1895

By Shawn Jansen
Moose Lake Star Gazette 

Pine County proposes sales tax

Public hearing set for August 16

 


The Pine County Transportation Committee proposed at the regular county board meeting last Monday replacing the wheelage tax with a sales tax to fund county road projects.

District 1 Commissioner Steve Hallan explained the proposal entails adding a ½ percent sales tax on taxable items purchased, not including gas, in lieu of the current wheelage tax. Hallan added the tax would only apply to items currently taxable.

According to figures from the state, he said, the proposed tax would bring in an estimated $730,000 to the county, compared to the current wheelage tax, which brings in about $260,000. Hallan said the net gain then is about half a million, designated strictly for projects.

Commissioner Matt Ludwig of Sandstone asked, “What’s the duration of this?”

“It’s for 10 years and then it sunsets,” said Hallan.

“Or, when the dollar amount is collected,” added David Minke, Pine County Administrator. “So, you set the dollar amount of the tax to coincide with the projects, and then, whatever comes first, the collection of the dollar amount or 10 years.”

It was pointed out a specific road plan would be needed for this type of funding.

District 2 Commissioner Joshua Mohr asked about the possibility of not collecting enough to pay back bonds.

County Engineer Mark LeBrun explained bonding was a separate issue. If the sales tax was implemented, LeBrun said they would look at the program and what was coming in and determine bonding separately.

LeBrun said, “There’s a limit to what we can do in a year.”

Minke clarified further, later in the discussion, that unless there’s a gap, there would be no need for bonding, but the amounts needed would depend on the project schedule.

LeBrun gave several reasons for pursuing the sales tax option. One, with the sales tax, the county could complete road projects in 10 years that would take 30 years with the wheelage tax.

He explained sales tax allows people who don’t live in the county, but use the roads, to contribute to the county’s transportation system, as opposed to increases in property taxes.

If you go to Duluth, Moose Lake, Rush City, you’re paying the tax, LeBrun said.

LeBrun said, “We’re focusing on local funded roads.”

“People are going to see a real impact if this gets implemented on projects all over the county,” said LeBrun.

“We’ve looked to the state over the years,” but LeBrun said the entities haven’t come to an agreement. “When there’s a surplus and there’s no money for transportation, what does that tell you. I think we have to look at what our options are,” said LeBrun.

“The farther we get behind, the public’s going to demand (better roads),” he said.

LeBrun pointed out the request by Betty Berglund, who asked earlier in the meeting that County Road 22 be paved between County Highways 30 and 32. Berglund said the road is a connecting road that goes past the Danforth Church, one-room school and cemetery. She said one morning she counted 27 logging trucks pass. “People pull over for them,” she said. “So far we haven’t had any accidents.”

“I’d love to see her road paved, too,” said LeBrun.

Chair Curt Rossow of Willow River said, “The process starts today. We need a public hearing.”

LeBrun also explained the increase would be no additional burden to businesses collecting the tax. The tax doesn’t tie the hands of future boards and it is how large road projects are being financed around the state.

Ludwig said he receives more phone calls that pertain to roads than anything else.

“It’s a jobs program, too. When we spend money building bridges, building roads, those are good jobs,” added LeBrun.

The proposed half percent increase in sales tax would increase the sales tax from 6.875 percent to 7.375 percent, or an increase of $0.50 per $100 purchase on existing sales tax items. The tax would begin January 1, 2017, and the wheelage tax would end December 31.

A public hearing on the tax change was scheduled for 10 a.m. Tuesday, August 16, at the next county board meeting at the board room in the Pine County Courthouse in Pine City.

 

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