County commission presents case for transit sales tax
By Sarah Smith
A countywide sales tax to fund road projects got the thumbs down in Lake George and a mixed reaction in Park Rapids.
Hubbard County commissioners conducted two public hearings Tuesday in the two locations to get feedback on implementing up to a half cent sales tax for transit projects. Although the reaction was mixed, two dozen citizens at each meeting spoke their minds.
And commissioners and engineering personnel came under significant criticism as to how the county highway department operates currently.
A new law, the Greater Minnesota Transportation Sales & Use Tax, passed last year, allows counties to pass up to a half-percent sales tax to fund specific projects. It is not a carte blanche invitation for county commissioners to raise taxes and pave county roads and build transportation buildings just because they want to.
But many citizens perceived it as such.
“This is the wrong time to be doing this,” Lake George businessman Dennis Bessler said. “We’re in a recession.”
Bessler said if road projects were that important to the county, it would tighten its belt buckle and fund such work through the tax levy and savings.
Many citizens at both meetings voiced the opinion that once a tax was imposed, it would never go away. County Attorney Don Dearstyne tried to explain that once the specific project is completed, the tax stops, but that logic fell on deaf ears.
The few citizens who favored the tax said it would be passed on to the county’s mainly summer customers, who not only use the roads but shop at county businesses.
And that in itself was controversial.
“It’s a sneaky underhanded way to pass it on,” Bessler objected.
Non-residents and tourists would not have a vote, nor would citizens.
A vote by the county board would suffice to pass the tax. No popular vote is required, according to the law passed by the 2013 State Legislature. Transit projects could be funded via a vote of three of Hubbard County’s five commissioners, a simple majority.
County engineer Dave Olsonawski, who proposed the tax, said funds could be spent for maintenance improvements on county roads. State-aid funds won’t help counties pay for such improvements, he pointed out.
“It costs $200,000 to re-do roads per mile,” he noted.
The county has 200 miles of county roads, only 51 of which are paved.
When the population gains 60,000 to 100,000, that traffic puts a lot of stress on local roadways.
A variety of improvements can be made, Olsonawski told both crowds, once a project is earmarked. Gravel, paving, construction of highway buildings and maintenance are some of the projects he envisions.
“It will stretch the dollars we have,” he said.
Many citizens complained about the half-million dollars the county spends annually on chloride for gravel roads, but Olsonawski said it improves them by years.
“We know sales taxes never quit. Just be honest,” objected citizen Jay Johnson at the Park Rapids building.
“I believe it’ll never go away,” said resident Ray Ball.
“Our township thought it would be great,” said resident Ed Dvorak.
“The fairest way to do it is to assess the people who don’t live here,” said Armory Square owner Alan Zemek.
Board chair Kathy Grell said in consulting with the state, it would cost $15,000 to $20,000 to “turn the tax on.”
Because of high costs to turn it off, the board reasoned it should be implemented project by project instead of during the summer seasons.
“This subject is not new,” said former long-time commissioner Dick Devine. “If you start it at .5 percent, you don’t know where it ends. I’m not in favor of it. We don’t know what this will be 10 or 15 years down the road. If we need the roads we can raise the levy.”
“The primary goal of the legislation is to shift some of the tax burden from local property taxes to a sales tax collected from everyone using the county road system including visitors to the Hubbard County area,” the board said in invitations to attend the meetings.
“Our property tax level is not fair,” said Park Rapids city councilman Rod Nordberg. “We should tax the users.”
If the county taxed the full .5 percent level, it is estimated $1 million could be raised in a year.
Downtown business owner Cynthia Jones said the Downtown Business Association did not take a formal position on the tax. But she said she personally favors it.
“I see this as a godsend,” she said, enumerating the funds downtown business owners spend themselves on flowers and other accessories that make the downtown charming.
“It would cost the merchants nothing to pay for it,” Jones added.
But even Bessler reasoned there might be some reason to impose the tax.
“Dave’s cheap,” he said of the frugal engineer. “He must want it bad to put himself in that hot seat.”
But at least one attendee said he would use the right to vote that Minnesota Statutes Annotated §297A.993 seemed to bypass.
“If you vote for this I’ll vote you out of office,” he promised the commissioners.
The board said it would take all the comments into consideration and vote later.