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Roads in Douglas County would benefit from a new local sales tax of 0.5 percent. (Echo Press file)
Roads in Douglas County would benefit from a new local sales tax of 0.5 percent. (Echo Press file)

Local sales tax tabled

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news Alexandria, 56308

Alexandria Minnesota 225 7th Ave E
P.O. Box 549
56308

Douglas County commissioners put off making a decision on a countywide sales tax increase that would generate funds for county road repairs.

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With a 4-1 vote, the Local Option Sales Tax for Transportation vote was tabled until the county board’s next meeting on Tuesday, April 15.

Commissioner Bev Bales voted against tabling the action Tuesday. Over the last few weeks she has said she supports the tax increase proposal.

The countywide sales tax would increase by one-half percent and, within eight to 10 years, generate roughly $38 million to be used for county road repair and reconstruction.

The push to wait on a vote sprouted up when Commissioner Jim Stratton proposed rescinding Douglas County’s current wheelage tax before approving the sales tax increase.

“That is taxing on a tax. I mean, we’re doubling up,” he said.

As a matter of order, rescinding the wheelage tax would require separate action by the board, Bales noted.

“That was not on the agenda; that will not give folks a chance to speak to that issue. I do not think that should be voted on today. I think that should be separate,” Bales said. “I think it’s disrespectful to talk about an issue without it being publicized.”

Stratton made a motion to table the sales tax vote and said, “Even though I think [the local option sales tax] is a fair… tax, without the additional [wheelage tax rescinded], I will not support [the sales tax increase].”

Douglas County’s wheelage tax is $10 tacked onto vehicle license tab renewals. The wheelage tax is set to increase to $20 per vehicle in 2018. It was approved by commissioners in July of 2013 and went into effect in January 2014.

The wheelage tax is projected to bring in $360,000 this year to be used in the county’s road and bridge fund.

WHY RESCIND WHEELAGE TAX?

After the meeting Tuesday, when asked specifically why he wants to rescind the wheelage tax, Stratton told the Echo Press, “I voted against it when it came up last year mainly because I didn’t think it was a fair tax and I knew this half-percent tax was out there. I don’t think our county residents need to be taxed twice and that’s what we’re doing.

“The wheelage tax only manufactures $360,000 versus $3.5 million, of which 40 percent can come from outside the county. I understand there’s concern, but if we can get it out to the general public that it’s $5 on every $1,000 that’s spent. It’s not a big dollar amount,” Stratton said.

COMMENTS AND REACTION

The local options sales tax increase requires a public hearing and that was held as scheduled Tuesday.

Before commissioners tabled the vote, four people spoke out against the sales tax, including Bob Kuhlman of Alexandria, who handed over an additional list of names as part of a petition he originally presented to the board on March 20.

Kuhlman told commissioners Tuesday, “I believe with this petition that you were given, maybe this should go to a public vote. I know you don’t have to go to a public vote, but you should see what the public opinion really would be on that.”

Commissioner Charlie Meyer commented, “I absolutely despise the sales tax going back to 1966. I’ve been in business all my life. I don’t know – this just tears me. I don’t have an answer for the roads. I’ve collected sales tax forever and I think it’s the most unfair damn thing there is. We don’t want to send people out of the county to buy, but we’re not the only county doing this for the roads. The only thing that makes [the sales tax increase] look good to me is that it doesn’t go on our property taxes and 40 percent of it is paid for from outside the county.”

It’s not clear where commissioners came up with the 40 percent figure. Commissioners Dan Olson, Meyer, Bales and Stratton have all cited the statistic during recent sales tax increase meetings.

The Echo Press checked in with Alexandria Area Economic Development Commission (AAEDC) Director Jason Murray to see if it came from his office and he said it did not come from the AAEDC. Murray said he can only speculate that it may be from a Lakes Area Recreation study done at least 10 years ago; that information was also reportedly used by commissioners about five years ago during county building construction funding discussions when they discussed a sales tax increase to fund those projects.

‘NOW IT’S UP TO THE COUNTY BOARD’

On Wednesday, Douglas County Public Works Director and Engineer Dave Robley told the Echo Press he was fine with commissioners tabling the sales tax increase vote.

He also said if the county’s wheelage tax is eliminated, the list of projects tied to that funding won’t have another funding source other than property taxes.

Robley noted, regardless, this year’s county road construction project list is set.

However, he said, “Planning for next year, 2015 and beyond, totally depends on what’s approved and what funding is available. It could change quite dramatically.”

Robely said the state Legislature hasn’t increased transportation funding on a statewide basis to address the need, “…but they did provide these two options (wheelage tax and local option sales tax) for local governments to use as a source of transportation funding. They made it available and now it’s up to the county board if they want to take advantage of it.”

If commissioners ultimately approve the local option sales tax increase, it could go into effect as soon as October 1.

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