Hennepin County Board might raise vehicle tax

The Hennepin County Board is expected to vote Tuesday on whether to double its annual wheelage tax on vehicles from $10 to $20, in order to fund needed road and bridge improvements.

The increased tax would raise $10 million annually, still short of the $25 million that public works officials told the board is necessary each year for longtime preservation of the county's transportation assets.

Commissioner Jeff Johnson, who will be out of town for Tuesday's vote, predicted the tax will pass 4 to 2. He said he would vote against it because the county could have prioritized funding for road improvements in its current $2.3 billion budget.

Commissioner Mike Opat agreed.

"I don't believe in flat taxes. The poor pay more than their share with a flat tax," Opat said. "We have other ways to fund more for transportation. We have the property tax and the transportation sales tax. Both are better options in my opinion."

Wheelage taxes are paid as part of a driver's annual vehicle registration fee. The county must inform the state by Aug. 1 — next Thursday — that it has raised the tax, and it would then go into effect Jan. 1.

The Legislature voted last year to allow counties to raise the wheelage tax to $20. Ramsey, Washington and Carver counties all have $20 wheelage taxes.

"Most of our system is in fair to good condition, and to maintain that level, we need the $25 million," Sagsveen said. "The wheelage tax doesn't get us all the way there, but this was a potential option we suggested to the board."

The board was given other funding options, such as raising property and transportation sales taxes or issuing general obligation bonds. A portion of the shortfall was caused when the Legislature failed to raise the state gas tax this year, Sagsveen said.

Two votes for doubling the wheelage tax will come from Commissioners Angela Conley and Irene Fernando. At a recent meeting, Conley said she constantly hears from constituents that county roads are dangerous.

"We need to make repairs and tax the people who use the roads," she said. "I don't want to be driving down Park Avenue" — also known as County Road 33, in south Minneapolis — "and get a flat tire because of a pothole."

Fernando has been public about her stance, sending out tweets explaining why she plans to vote to double the tax. The county must ensure that its 2,200 lane miles of infrastructure are safe, connected and well-maintained, she said.

"The wheelage tax is just one of many actions Hennepin County must take," said Fernando. "Without this tax, we risk further deterioration of our roads and bridges, which impacts safety and lowers quality of service."

Commissioners Debbie Goettel and Jan Callison said they hadn't yet taken a position on the tax. Callison said she doesn't question the need for additional revenue to maintain roads and bridges, but she said the wheelage tax is regressive and has a disproportionate impact on low-income people. She also noted that the wheelage tax is paid only by county residents and businesses even though county roads serve the metro region.

Last year, Callison unsuccessfully proposed that the county use some revenue raised by the transportation sales tax for roads and bridges.

"Doing so would be consistent, in my opinion, with the uses proposed by us in the transportation sales tax plan and would spread the benefit of the sales tax — raised throughout the county — to county residents and businesses who do not reside along transit lines," she said.

Having to vote for the wheelage tax by the end of the month adds to the difficulties, because the County Board won't adopt its 2020 budget until December, Callison said.