In hopes of shoring up funding for transportation and transit projects, Dakota County officials are looking into levying an additional quarter-cent sales tax countywide.
Over the next 15 years, it will cost $1.25 billion to support highways across Dakota County, staff projected. Current funding sources will generate just slightly more than $600 million during that time frame. A new local sales tax would add about $15 million annually for county transportation, helping to close the gap.
But before the county can levy such a tax, it needs approval from the Legislature.
Last week, the Dakota County Board supported the creation of a bill that would grant it , and four other counties, the authority to impose the additional tax. County staff members are working on the language of the bill and will seek sponsors to introduce it in the Legislature.
Commissioner Chris Gerlach said he is not “100 percent sold” on the tax but he wants to have it as an option.
The bill would change a law from 2008, which authorized the five metro counties that make up the Counties Transit Improvement Board to levy a quarter-cent sales tax to fund projects in the metro. Others counties are allowed to levy twice as much. They can use up to a half-cent tax to fund their transportation and transit projects.
“We’re looking for parity with the rest of the state,” Commissioner Kathleen Gaylord said.
The board decided to move forward with the tax after reviewing the transportation finance bills that Gov. Mark Dayton, Senate Democrats and House Republicans have proposed so far this year.
None of the bills would meet the county’s needs. County staff estimated the financial impacts of each of the proposals:
• Under the Senate Democrats’ proposal, Dakota County taxpayers would pay an additional $58.3 million per year for roads and transit and 45 percent of that new money would be spent outside the county.
• In the governor’s plan, Dakota County residents would pay $43.4 million in new transportation taxes and fees, and 52 percent would leave the county.
• House Republicans proposed no new taxes on residents for transportation and transit. The county would get a one-time appropriation of less than $800,000 to cover transit and roads.
Commissioners frequently question whether Dakota County taxpayers are getting a fair return on their transportation investments.
The board members liked that all the revenue from a new quarter-cent sales tax would be spent in the county, and the county would have the full say in how the dollars are used.
“That quarter percent would be completely under your control,” Physical Development Director Steve Mielke said.
Additionally, he said, the county needs to advocate for more funding for the Minnesota Department of Transportation.
“Frankly, we’re having to stand in for MnDOT because they don’t have adequate resources,” Mielke said.
Dakota County residents end up subsidizing state highways with their property taxes, commissioners said.
“More and more of our transportation projects are relying on property taxes,” Commissioner Liz Workman said.