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Serving Northern St. Louis County, Minnesota

County weighs sales tax hike

Half-percent increase would raise estimated $10.5 million a year for roads

Aloysia Power
Posted 11/19/14

REGIONAL – The St. Louis County Board is considering the adoption of a half-percent sales tax increase county-wide and is asking for the public’s views on the plan. The new tax, called the …

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County weighs sales tax hike

Half-percent increase would raise estimated $10.5 million a year for roads

Posted

REGIONAL – The St. Louis County Board is considering the adoption of a half-percent sales tax increase county-wide and is asking for the public’s views on the plan. The new tax, called the Transportation Sales Tax, would help fund the county’s Transportation Improvement Plan, which includes repairing 670 miles of faulty pavement, suppressing the dust on 500 miles of gravel road, reconstructing 79 critically defective bridges and advancing 75 safety projects, including Safe Routes to School projects. The proposed tax would apply to anything the state already subjects to sales tax.

Along with the new sales tax, the St. Louis County Board is also proposing a one-time $20 excise tax on retail vehicle sales, which would be in lieu of the new sales tax.

All together, the sales and excise tax would raise approximately $10.5 million a year in addition to the property tax levy which already supports the Transportation Improvement Plan.

In all, the transportation plan asks for over $642 million. All but about $9 million of this total would go toward the improvement of bridges, paved and gravel roads, and transportation safety.

About $7 million of the $10.5 estimated annuall sales tax revenue would go toward extending the life of the county’s paved roads by up to 15 years. About $2 million of the tax revenue would be allocated for bridge repairs, with a special focus on replacing timber bridges. And $1 million of the revenue would fund safety projects, including intersection-related safety projects. The rest of the $500,000 would be invested in the maintenance of high-traffic gravel roads.

Fourth District County Commissioner, Mike Forsman, said he was “open-minded” about the sales tax, stating it could greatly benefit the district’s over 1,700 miles of road.

“In the fourth district, we would be the big winners because we have the greatest amount of roads,” said Forsman.

The transportation plan would address over 30 defective bridges in the fourth district, including 10 bridges around the city of Cook, and various poor road conditions particularly around Embarrass, Hoyt Lakes and Ely.

Forsman said the new tax would also benefit southern St. Louis County, particularly Duluth, even though the city has only 10 percent of the county’s roads.

“You can’t get to Duluth without going on county roads,” said Forsman, further stating that many Iron Rangers travel to Duluth to shop, and would be a major force in revenue for the new sales tax.

According to the county’s press release, county board members are in favor of the Transportation Sales Tax because an estimated 30-40 percent of the levy’s revenue would come from non-county residents, including motorists who drive on St. Louis County roads but don’t pay property taxes in the county. The press release went on to state that revenue generated from the Transportation Sales Tax would be equivalent to a 9.3 percent increase in the county’s property taxes.

If implemented, the new tax collection would begin next April and its related road and bridge projects would begin in the summer. As part of its approval by state legislators in 2013, the new tax would end once the slated transportation projects are completed.

A public hearing on the proposal was held in Duluth on Nov. 18, and two more will be held, in Hibbing and Hermantown. The Hibbing public hearing is set for Nov. 25 at 9:50 a.m. at the Hibbing City Council Chambers. The last scheduled public hearing will be at the Hermantown City Hall on Dec. 5 at 5 p.m. Forsman said he is unsure as to when the county board will vote on the tax, but said it could be as early as their Dec. 2 meeting.

St. Louis County, Ely