County wheelage tax might pay for a new bridge in Minneapolis
- Article by: KEVIN DUCHSCHERE
- Star Tribune
- July 15, 2011 - 8:11 PM
Hennepin County could bring back a tax it hasn't used in 36 years to help pay its share of the Lowry Avenue Bridge, now under construction in northeast Minneapolis.
It's called a wheelage tax, and it's collected from vehicle owners in five of the seven metro-area counties able to impose it under state law. Only Ramsey and Hennepin don't have it.
That could change Tuesday, when the Hennepin County Board will take up a resolution by Commissioner Peter McLaughlin to charge $5 per vehicle (except motorcycles and some trailers) starting next year.
The $4 million that the wheelage tax would generate annually would be used to pay down most of the county's $51.7 million debt on the bridge, slated to be finished next summer.
McLaughlin said that the new tax revenue would replace the property taxes now used to finance the bridge. If the board approves the wheelage tax, he said, the property tax levy would be reduced by a corresponding amount.
"Historically, we haven't used debt backed by property taxes to pay for roads. We've used gas taxes and user fees like that," he said. "Property taxes are not how we ought to be subsidizing roads."
McLaughlin's proposal could be a hard sell with commissioners reluctant to entertain a new tax at a time when the very term has become a swear word in some circles.
Commissioner Jeff Johnson, the board's most vocal Republican, said he opposes the wheelage tax.
"We are constantly looking for new ways to tax people, and we don't need them," he said. "We've got a $1.56 billion budget. If we have to create a new tax because we can't find $4 million in there for the bridge, we need to look at our priorities."
Commissioner Mark Stenglein, whose district includes the bridge, also said he will vote against the tax.
"It's one more incremental tax. I represent a lot of poor people. Granted, it's just $5 [per vehicle] -- but it's another $5," Stenglein said.
The Legislature in 1971 passed a measure allowing metro-area counties to levy a $5 wheelage tax to pay for roads and bridges. The Hennepin Board levied the tax for three years and then stopped in 1975.
Anoka, Dakota and Washington counties began collecting the tax in 2007, joined a year later by Carver and Scott.
Records for 2010 show that Hennepin County has about 860,000 registered vehicles that would be subject to the tax. Minus administrative payments, the tax would generate a little more than $4 million.
The total cost of the Lowry bridge is $92.7 million, which includes $37.5 million from the state, $2 million from Minneapolis, $900,000 from the federal government and $200,000 from Xcel Energy, in addition to the county's portion.
It became clear the bridge needed to be replaced when its century-old pilings began to fail, McLaughlin said. It wasn't in the county's capital plan, making it a good candidate for the wheelage tax, he said.
"It's a better way to pay for an unexpected major highway improvement ... [and] an opportune moment to take it on," McLaughlin said. "The property tax is under pressure, and this is the way to relieve that pressure."
Kevin Duchschere • 612-673-4455
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