Hands off new sales tax, 7 counties tell state

Vowing to fight a move by Gov. Tim Pawlenty to "steal" their money, metro area county commissioners Friday agreed on terms that could bind them together to finance new transitways, then headed home to prepare for votes in their individual counties on whether to impose a quarter-cent county sales tax for that purpose.

Hennepin, Ramsey, Dakota, Anoka, Washington, Scott and Carver counties have meetings scheduled that would allow a vote March 25 on the tax if commissioners are ready and members of the public have had time to comment.

Scott and Carver are expected to vote it down. In the other counties, the tax has at least a chance of passing.

Counties that impose the tax by April 1 would start collecting it on July 1 -- putting them in a position to capture an estimated $3 million to $6 million from the Republican National Convention in St. Paul in September.

But Anoka County Commissioner Dennis Berg said he is reluctant to ask his board to vote while the governor and legislators are still trying to balance the state budget. If the counties put a new tax on the table, Berg said, "They are going to start coveting it.'' The sales tax would bring in an estimated $100 million a year.

Dealing with Met Council

In a provision that is unpopular with the counties, the first $30 million collected through the sales tax must be forwarded to the Metropolitan Council to cover a $17 million bus and rail operating deficit and other existing transit needs.

This week, commissioners learned that the Met Council may need even more money because Pawlenty suggested trimming $26.8 million from Met Council's budget as part of a proposed 4 percent cut to most state agencies to solve the state's $935 million deficit.

County commissioners said the Met Council has already approached them -- in light of their potential new sales taxing powers -- for possible help in handling such a cut. But the commissioners said Friday that the sales tax is for visible new transit improvements -- not to cover the state's budget deficit.

"We have got to fight this and fight it every step of the way,'' said Hennepin County Commissioner Peter McLaughlin. "This is not the bailout for the governor.''

The friction has its roots in the passage of a $6.6 billion transportation bill by legislators in February over the governor's veto. That bill allows the counties to pass a quarter-cent addition to the sales tax to raise money for transit improvements.

McLaughlin charged that the governor vetoed the tax but is now trying to use the revenue to balance the budget. "He hates the tax but loves the revenue,'' McLaughlin said.

Pawlenty spokesman Brian McClung said: "Gov. Pawlenty believes the $6.6 billion transportation tax increase passed by the DFL-controlled legislature was a bad plan in a struggling economy.''

The governor doesn't "love" the sales tax or the revenue, McClung said. "We'd prefer the taxes and resulting revenue weren't being taken from Minnesota taxpayers.'' And the provision sending the initial $30 million from the sales tax to the Met Council was written by the DFL, which passed the bill, McClung said.

Outlining a common cause

In three meetings over the past two weeks, the counties created and defined the joint powers board that will combine the sales tax revenue from each county into a new pool to pay for metro transitways.

On Friday, they came close to a deal-breaking impasse when Dakota and Washington commissioners balked at being committed to big rail projects and the accompanying debt payments -- in projects pushed by the bigger counties. And the bigger counties balked at the idea of giving the smaller counties enough voting power to nix such a project.

"We don't want somebody else telling us what our bills will be in the future,'' said Dakota County Commissioner Nancy Schouweiler, who chairs the Dakota County Board. She wanted to require 80 of the 100 votes divided up among the counties (based on population and sales tax receipts) to finance a big project. If all seven counties sign onto the joint powers agreement, Hennepin would have 44.35 votes, Ramsey 16.94, Dakota 12.43, Anoka 9.33, Washington 6.33, Scott 3.39 and Carver 2.24. The Met Council would have 5 votes.

Anoka County Board Member Dan Erhart said, "We are here to put together a transportation system for the entire metro area.'' No one county should be able to derail what the group is trying to do collectively, he said. He favored approving financing for projects with a 63-vote majority.

Ultimately, the counties were able to agree that issuing bonds in an amount of more than $100 million for longer than five years would take a 75 percent vote by the counties.

Dakota and Washington were able to negotiate terms in the joint powers agreement that would allow them to keep money collected through the sales tax within their counties for special bus projects.

Dakota will be permitted to apply to the metro pool for cash to operate the Cedar Avenue bus rapid transit project, which would give buses their own lanes and priority at traffic lights, expand existing park-and-rides and, eventually, build new stations from Apple Valley as far south as Lakeville.

Washington County would be permitted to keep 1 percent of the total tax proceeds for three years to continue the popular Forest Lake-to-downtown-Minneapolis commuter bus service.

Another sticking point was how to allow counties to leave the joint powers board after they have imposed the tax and joined the pool. The commissioners agreed that a county would have to give three years notice before pulling out and then would have to continue paying for the transit improvements it approved while on the board until the obligations are fulfilled.

The joint powers agreement now must be passed by each county that joins, without amendments, as part of its decision to impose the sales tax.

Laurie Blake • 612-673-1711