Tuesday: Ramsey, Anoka OK quarter-cent sales tax increase

Two of seven metro-area counties voted Tuesday to impose a quarter-cent sales tax for transit improvements, with collection to start July 1. Meanwhile, two counties were rejecting the tax.

By wide margins, Ramsey County and Anoka County commissioners approved the sales tax to help finance new rail lines and bus transitways.

Carver County commissioners unanimously voted down the tax, saying it would not benefit the county. Scott County commissioners also agreed on a resolution rejecting the tax, subject to a formal vote next week.

The remaining three counties -- Hennepin, Dakota and Washington -- are expected to vote on Tuesday.

The seven counties were given the option to impose a sales tax for transit as part of a landmark $6.6 billion state transportation bill passed by state legislators over the governor's veto in February.

The new tax, equal to a penny on a $4 purchase, could generate about $100 million a year. Among other projects, the revenue would be used to launch Northstar Commuter rail service from Minneapolis to Big Lake next year and help finance the proposed light-rail line from downtown St. Paul to downtown Minneapolis.

For the consumer, it raises the state's existing 6.5 percent sales tax to 6.75 percent. Clothes and food are exempt.

But even as they pass the new sales tax, county officials worry that the governor or legislators will use the revenue for existing transit needs.

The counties feel strongly that the tax should be used for new transit to address congestion, Ramsey County Commission Jim McDonough said.

At their meeting Tuesday, Ramsey commissioners reviewed an option that gives counties the right to rescind the tax before July 1 and collect it for just one quarter, if the counties disagree with the way the revenue is being used.

Ramsey County

In voting 6 to 1 in favor of the transit tax, Ramsey commissioners said they like the idea that residents and visitors from many locations would pay a sales tax to support a regional transit system. But the counties must be vigilant, McDonough said, to ensure the tax money is used to improve on and build new transit systems.

Scott County

In Scott County, the public works director, Lezlie Vermillion, made clear to commissioners during a work session that the county's transportation staff worries about the long-term consequences of failing to take part.

"We could lose out on dollars" in more ways than one, she said, if the county is viewed as failing to become a full partner with the others in the metro area. It might not just be the sales tax proceeds -- other funds that depend on support from other metro counties could also be affected.

Most of the commissioners, as they went around the table expressing their opinions, emphasized they might want Scott to join later on.

Anoka County

Commissioner Rhonda Sivarajah asked that the vote be delayed to have a public hearing. She reminded fellow board members, "We talk about it like it's not a tax increase. It is."

Anoka board Chairman Dennis Berg stressed that a quarter-cent tax is preferable to raising property taxes.

As for adding a tax at a time when foreclosure rates in Anoka County are among the highest in the metro area, Commissioner Jim Kordiak said: "It never seems to be the right time. This is a rather unique opportunity I think we should grasp."

Carver County

Carver County commissioners also voted down the tax because the county has no rail line waiting in the wings for the funding. They said it's unclear how the tax could provide money for the future bus service the county may need.

Hennepin County

In Hennepin County, the biggest potential contributor to the transit sales tax pool, the board will vote on the tax on Tuesday after a briefing and discussion scheduled for Thursday morning.

In two public hearings last week, testimony from residents and interest groups generally fell on the pro-tax side.

But some commissioners have received heavy e-mail and phone lobbying from people who are opposed to the tax, and at least one of the seven commissioners, Penny Steele, said she will vote against it.

Washington County

Commissioner Dick Stafford, who might have the swing vote on the board, said Tuesday he remains undecided. But he represents Woodbury, the county's largest city. Woodbury's city leaders are on record in support of mass transit, said Mayor Bill Hargis. "We're encouraging Dick to vote for it," he said.