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Tab renewal taxes to double

Washington County motorists will see a $5 tax increase on their license tab renewals starting in January, which will add up to much needed revenue for county road improvements, officials say.

The "wheelage tax" the state imposed on all 87 Minnesota counties this year will double from $5 to $10 on each motor vehicle kept in the county.

Not all counties were in favor of the increase, which meant they had to take an all-or-nothing approach by the Aug. 1 deadline. Anoka County officials voted last week to stop collecting the wheelage tax, a move that meant losing $1.3 million in revenue.

But Washington County has always advocated for the increase that will double their annual revenue for roads and bridges from the current $1 million.

"The idea is to keep the pressure off the property tax," said Lisa Weik, Washington County commissioner representing Woodbury, "and definitely take almost $2 million that we would generate each year."

Counties did not have authority to choose a specific amount or stick with the old $5 figure because a state computer system could not accept multiple values from each county until it gets fixed in 2018.

Counties that already had the wheelage tax in place did not need a vote to go up from $5 to $10, while others had to vote to collect it for the first time, or repeal it.

Washington County began collecting wheelage tax revenue in 2008. With the new legislation, the money, tacked on by the state and distributed back to the county, will go toward local public works improvements.

Five years from now when the state computer issue is expected to be resolved, counties might have to revisit the issue.

"We could go back to $5 in 2018, we could go to $0," Weik said. "Maybe all the roads will be in tip top shape by then."

But she doubts that'll be the case.

"We're growing and developing like crazy," she said, noting that roads are a major aspect of local economic development.

County roads are not in tip top shape as of now, with many of the pavements crumbling and in need of replacement or repair, according to engineers' assessments.

Autumn Lehrke, Washington County commissioner representing Cottage Grove, said it's a common problem heard by her constituents.

"Washington County has several miles in the red zone and that's unacceptable," she said. "With this additional funding, we'll be able to stay on top of our roads."

With "severely under-funded" roads, Lehrke said she looks at the wheelage tax as a user fee that doesn't cause each resident too much hardship.

Examining other options like increasing the gas tax by five cents, or the property tax levy, would have a much bigger impact on the general population, she said.

"We could've also looked at increasing the levy and putting more dollars into the levy," she said. "But then if you have a senior citizen who lives alone at home versus a family of five driving, why are they paying the same for roads?"

Lehrke said the county just received $1.5 million from the federal government to fund a project in Newport. By collecting money from the wheelage tax, funds could be moved around to get more projects on the docket.

"It's going to be a ripple effect," she said. "We're going to be able to move projects up that we haven't been able to do or have been delayed."

According to the statute, vehicles exempt from the wheelage tax are motorcycles, motorized bicycles, electric assisted bicycles, and motorized foot scooters.

Riham Feshir
Riham Feshir is a reporter and photographer for the Woodbury Bulletin. Her coverage includes Woodbury City Hall, Washington County Board of Commissioners and business news.  Follow Riham on Twitter @RihamFeshir for the latest updates.