Car tax increase deadline bearing down on Minnesota counties

Minnesota car owners could be paying another $5 to $10 in taxes per vehicle next year to hit the roads.

Because of legislation passed in the recent session, counties now have the authority to collect a $10-per-vehicle wheelage tax to use for infrastructure improvements, from road upgrades to light-rail lines. Some counties already have agreed to collect the new tax, but many are still weighing the options.

Counties must notify the state by Aug. 1 if they want the state to collect the tax next year, or they will have to wait another year.

Debra Brisk, assistant Hennepin County commissioner for public works, said there's a strong need for the tax in her county. "We definitely have a laundry list of needs to use the money," she said.

The Hennepin County Board is scheduled to vote on the tax July 16, with a public hearing set for next week. At least two commissioners have said they won't support a wheelage tax.

Until this year, only seven Twin Cities metro counties could collect the tax, then set at $5 per vehicle. Residents of Anoka, Washington, Carver, Dakota and Scott counties already pay it. Although the Legislature earlier had given Hennepin and Ramsey counties the authority to collect the $5, their boards didn't use it.

In the five counties already taxing residents, the annual fee will double unless county board members vote to dump the tax:

Anoka County spokeswoman Martha Weaver said the commissioners there will take up a resolution to repeal the $5 tax rather than let it double. So Anoka County car owners will see a $5 tax decrease if the repeal passes. It will go before the Public Works Committee on July 15.

In greater Minnesota, Mower and Rice counties have agreed to collect the tax, Donahoe said. Faribault and Otter Tail counties are openly considering it, as is Rochester-centered Olmsted County.

Many other counties supported this year's legislative vote to broaden the tax, so Donahoe expects many will embrace it. She noted, however, that it would not bring in a significant amount for every county, especially those with fewer cars to tax; in some, the amount could be only about $50,000.

"It's nowhere near a windfall," Donahoe said. Still, every bit helps as "counties are struggling to fill potholes," she added.

If the Hennepin County Board approves a wheelage tax at its July 16 meeting, it would collect an estimated $9 million. A public hearing on the issue is set for 1:30 p.m. Tuesday in the board's meeting rooms at the Government Center in downtown Minneapolis.

"Certainly for Hennepin and Ramsey, it's a pretty significant amount of money, but of course they have substantial needs as well," Donahoe said.

It's not the first time Hennepin County has weighed a wheelage tax. In July 2011, it rejected an attempt to establish a $5-per-vehicle wheelage tax to help fund replacing the Lowry Avenue bridge.

One opponent is no longer on the board, and it's unclear whether opinions have changed.

But on Tuesday evening, board Chairman Mike Opat and Commissioner Jeff Johnson said they won't support a wheelage tax.

"We have enough money in the system now," Opat said. "I'm not sure we have that great a need for more road spending."

Hennepin County Commissioners Peter McLaughlin and Gail Dorfman voted for the tax last time. McLaughlin is pushing hard for the increase.

"This money could jump-start our road system and help get it back into high-quality shape, improve safety, save energy, and provide better movement on county roads," he said in a news release.

"This could also be used to reduce property taxes currently going into the road system."

Brisk said she, too, believes Hennepin County strongly needs a wheelage tax. "You either paint your house now or you paint it two years from now," she said. "The question is always: Is there a cost to waiting?"

Rochelle Olson • 612-673-1747 @rochelleolson