Counties must act fast to get transit tax funds

  • Article by: LAURIE BLAKE , Star Tribune
  • Updated: March 5, 2008 - 9:29 PM

Seven metro-area counties have three weeks to decide if they want to start collecting new tax revenues by July 1.

Metro-area counties learned Wednesday that they may have to move quickly if they want to start collecting a new sales tax for transit on July 1.

To remedy what they considered years of inadequate state funding for transit, legislators gave the seven metro counties the option of levying a quarter-cent sales tax for new rail lines and busways.

On Wednesday, Hennepin, Ramsey, Anoka, Dakota, Washington, Carver and Scott counties learned that they will have to act on that offer by the week of March 24 if they want to start collecting the sales tax by July 1.

Each county board has two time lines it can follow.

To collect the tax starting July 1, each board would have roughly three weeks to decide whether to levy a sales tax and enter into a new joint powers agreement with the other counties.

To collect the sales tax starting on Oct. 1, counties would have until the end of June to make those decisions.

"The bill expires by Oct. 2 if we don't have the tax imposed by then,'' said David MacMillan, an assistant Ramsey County attorney. The counties must "act quickly if they wish to impose the tax and start collecting it on July 1.''

The 90-day period required between the imposition of the tax and the startup of its collection allows the Department of Revenue time to set up for collections.

The decision on the sales tax will be easier for some counties than for others. Hennepin, Ramsey, Anoka and Dakota already are heavily into transit planning and finance.

Washington County is supporting the study of potential rail corridors but is not as far along as the others. Washington Commissioner Myra Peterson said that in voting on a sales tax, members of the county board will want to be assured that a new sales tax will deliver results.

"It's going to be really important to the suburban counties that we do have transitway improvements,'' Peterson said. "Some of my naysayers will need some assurances that there will be some additional transit opportunities for them.''

Scott and Carver counties, the smallest in the group, are considered the least likely to join the new transit pool.

Although the 2000 census found that 48 percent of Carver County work trips and 37 percent of Scott County work trips go to Hennepin County, both counties are in the fledgling stages of transit development.

As long as at least two counties form a joint powers agreement initially, the others will have the option to join later, according to MacMillan. They would be permitted to join the pool and levy the sales tax even after Oct. 1.

Proscribed spending

If all seven counties levy the sales tax, it is expected to bring in about $100 million a year for rail lines or busways. None of the sales tax revenues is supposed to be spent on regular bus route service.

But the Metropolitan Council would get $30 million off the top of the first sales tax collections to pay for an existing deficit, including the cost of extra commuter bus service while the Hwy. 35W bridge is out of use.

Forming a joint powers board for transit will require the counties to cooperate in a new way. Right off the bat they will have to agree how to divide decision-making power to give greater voting weight to counties with greater population and sales tax revenues.

Hennepin County Commissioner Peter McLaughlin suggested that the counties divide 100 votes among them based either on sales tax revenues or population or both.

Anoka County Commissioner Dennis Berg suggested giving three votes to Hennepin County, two to Ramsey County, and one each to the other counties. "I think it's important that no one county gets more than 50 percent of the vote,'' Berg said.

County representatives will meet again within 10 days to discuss a draft of a joint powers agreement. The date of the meeting has not yet been set.

McLaughlin said that gearing up to use the sales tax is going to be complicated politically and challenging technically. But, he said, "we ought to celebrate'' the new frame work.

He thanked the DFL legislative majority and the "courageous Republicans'' who "stuck their necks out" to override Gov. Tim Pawlenty's veto of the $6.6 billion transportation bill.

Now, said McLaughlin, "We are going to have to stick our necks out again if there is going to be a sales tax -- if there is going to be any revenue.''

Laurie Blake • 612-673-1711

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