Anoka County Board revokes wheelage tax

By Peter Bodley
July 26, 2013 at 3:21 pm

Anoka County residents won’t have to pay a wheelage tax effective Jan. 1, 2014.

The Anoka County Board on a 5-2 vote July 25 revoked the $5 wheelage tax, which a prior county board had voted had put in place in June 2006.

The $5 has been collected from motorists as part of the annual fee paid they pay when they purchase license plate tabs for their vehicles each year.

The tax money has been used, some $1.4 million a year, specifically for projects on the county’s road and bridge system.

Back in 2006, the Minnesota Legislature allowed metro area counties to impose the $5 wheelage tax if they wished.

What prompted the current Anoka County Board to reconsider the wheelage tax was new legislation passed by the 2013 Minnesota Legislature and signed by Gov. Mark Dayton.

The Legislature not only extended the wheelage tax option to counties outside the metro area, but increased the tax to $10 per year effective Jan. 1, 2014 through Dec. 31, 2017.

But there was no provision in the law to allow counties to retain the existing $5 a year tax.

If the county board had taken no action to revoke wheelage tax by Aug. 1, then it would automatically increase to $10 per vehicle per year come Jan. 1, 2014.

The county board action came on a recommendation from its Public Works Committee. Commissioners Carol LeDoux and Jim Kordiak voted no.

According to LeDoux, she struggled with this issue, but believes the wheelage tax serves the public good by providing funds for county road and bridge funds.

The tax amounts to 7 cents a day and returns $1.4 million a year to the county road and bridge system, LeDoux said.

While the county board has made great efficiencies in the past three years, the Legislature continues to pass laws that have “unintended consequences” on the county and its cities, she said.

“We had no plans to change it if the tax had remained at $5,” LeDoux said.

If the $10 wheelage tax was not in place, then the state gas tax would need to be raised 14 cents a gallon to compensate, she said.

Eliminating the wheelage tax will “saddle the property taxpayer” with paying more, LeDoux said.

According to Kordiak, the county board in 2006 “showed wisdom” and was a leader in using the wheelage tax provision in state law to provide more money for road and bridge projects.

He voted for it then and he supported the increase to $10, Kordiak said.

“The wheelage tax is a user fee on people who drive on the roads, like tolls,” he said.

The property tax is more regressive than the wheelage tax, he said.

Revoking the wheelage tax is a “curious step” for the county board to take and a “wrong-headed direction,” Kordiak said.

A dozen counties have opted to impose the wheelage tax under the new law, including two in the metro area that previously did not have the wheelage tax, he said.

According to County Commissioner Matt Look, anytime the county board has the opportunity to reduce a tax, he will support it.

The state has given the county no choice in whether it wanted to increase the tax from $5 to $10, Look said.

And in Look’s view, everyone uses roads in one way or another and should share in the cost, he said.

Revoking the wheelage tax is a “good move,” Look said.

County Commissioner Robyn West agreed with Look. “Everyone uses the roads whether they drive or not and they need the services that roads provide,” she said.

According to West, the state law increase of the wheelage tax without the county’s ability to keep it at the present $5 takes away from local control.

County Commissioner Scott Schulte also supported the wheelage tax revocation, he said.

The efficiencies that the county board and county staff have put in place over the past two years will mean that the loss of the wheelage tax income will not have a negative impact on the county’s road and bridge system, nor on the property tax levy, Schulte said.

County Commissioner Julie Braastad described the revocation of the wheelage tax as “responsible government.”

According to Anoka County Board Chairperson Rhonda Sivarajah, the Legislature has imposed this wheelage tax increase on counties because of issues with the state’s computer system handling the $5 charge, Sivarajah said.

“It’s either zero or $10, but I have no great faith that the state will solve the problem and by 2018, the wheelage tax will be increased to $20,” she said.

Revoking the wheelage tax is the responsible and right thing for the county board to do, Sivarajah said.

The county has been able to successfully leverage money from state and federal sources for its road and bridge projects, she said.

Indeed, for every dollar the county spends on roads and bridges, it receives $3 from other sources, Sivarajah said.

The wheelage tax is also very regressive because seniors on fixed incomes and those people who are less well off have to pay the same amount each year as the wealthy, she said.

“By revoking the wheelage tax, the county board will be a leader,” Sivarajah said.


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