Scott County Board approves transportation sales tax

After scrambling to educate local leaders and residents about the half-cent transportation sales tax, the Scott County Board approved the measure at a special meeting May 12.

The tax, which passed 4-1, will pay for a list of roadway projects across the county and provide some money for mass transit. It adds a half-cent to every dollar spent in the county, and a $20 excise tax for retail sales of vehicles. It's expected to go into effect Oct. 1 and generate about $6 million annually.

The board was ready to vote on the tax in April, but put on the brakes after hearing a lot of confusion from residents. Board members said they wanted spend as much time as needed talking about the tax at local government meetings and doing other outreach.

But then they learned of a measure moving through the state legislature that would include Scott and Carver counties in the Counties Transit Improvement Board (CTIB), which would collect a ¾-cent sales tax.

"We said, 'We need to act,' " Board Chair Jon Ulrich said.

By passing the half-cent sales tax before the end of the legislative session, the board preserved funds for local projects, even if the CTIB measure passes at the state level.

The Scott County sales tax was initially intended to sunset with the completion of all of the designated projects — causing some board members to joke that they'd all be dead by the time the tax was lifted. After the public input process, though, that part of the measure was changed. The tax will sunset Dec. 31, 2022, regardless of whether all of the projects are completed.

Elko New Market Mayor Bob Crawford said at the May 12 meeting that he's generally opposed to taxes but views this as a "self-defense tax."

"The state's going to get the money, or we're going to get the money," he said.

Still, there were some holdouts.

Bill Johnson, a Sand Creek Township resident, said his family has already had a difficult year with his truck breaking down and their property taxes skyrocketing. The fact that the transportation sales tax will help avoid a 10 percent property tax levy increase to pay for transportation projects doesn't resonate with him, he said.

"My wife and I will celebrate our 25th wedding anniversary this year. We had planned to go somewhere fabulous. Tropical," he said. "We can't afford to, so we're going to go drive out West and see the country."

"Everyone who shops for groceries cannot ignore the increased prices and/or shrinking packaging," she said. "More of our hard-earned dollars are being spent on necessities of life."

In Minnesota, sales tax does not apply to necessities such as clothing and food.

Taxing visitors

A major argument for the tax has been its applicability not just to Scott County residents but to visitors as well. With a slew of attractions including Mystic Lake Casino Hotel, Canterbury Park, Valleyfair and the Renaissance Festival, an estimated 30 percent of collected sales tax is expected to come from nonresidents.

The tax is also a way to leverage state and federal funds. By having the resources to provide money for projects up front, the county is hoping to spur fund-matching that will ultimately get those projects done.