OLIVIA — Renville County is exploring the possibility of a local option sales tax to help fund its road and bridge needs.
The county board of commissioners began the first tentative discussions on the possibility at their meeting on Tuesday. Board Chairman Randy Kramer urged the board to consider the possibility, though he acknowledged he was not necessarily ready to support it.
“I just wanted the discussion, not 100%,” Kramer said.
He noted during discussions that he favored a local option sales tax over the wheel tax already implemented in the county. The wheel tax is regressive, he said, because it imposes a flat fee of $10 per vehicle, regardless of its value.
Commissioners Greg Snow, Doug Erickson and David Hamre all expressed concerns about the increased tax burden, but also voiced support for increased revenue to meet transportation needs.
The county issued $13.8 million in bonds in 2020 to help meet road improvement needs. The county has planned $54.1 million for road and bridge work over the years 2023-2027, but commissioners have expressed concern that the county is not meeting its needs.
“I drove here on county roads,” Hamre said of his trip to the Olivia County office for the meeting. “Every day I think, ‘oh my God,’ we’re so late.”
During discussions, commissioners noted that a local option sales tax would collect revenue from county and out-of-county residents when they make purchases. Some would come from online sales.
Kramer pointed out that county residents now pay local option sales taxes when making purchases in many out-of-county locations, such as Willmar, Hutchinson and New Ulm.
Sales taxes on wheels and local options are transportation financing options that do not affect property taxes. Snow said council has been discussing raising the tax to help meet the county’s road needs, even though the commissioners don’t want to.
The county currently collects $190,000 a year in road tax, according to information provided to commissioners. The Minnesota Department of Revenue said a 0.5% local option sales tax would have generated $320,000 for Renville County based on actual 2019 taxable sales.
County Administrator Lisa Herges said she would inquire with a staff member at the University of Minnesota about a possible assessment to determine how much revenue the county might receive in the years to come. come and the share that would be generated by non-residents.
If a local option sales tax is to be passed, the county must hold a public hearing and identify which transportation projects would be funded by the revenue.
Kramer noted that it would be important to let residents know that the local option sales tax is being considered to raise additional funds for transportation needs, and that the tax would not be reduced.