A Kanabec County-wide 0.5% transportation sales and use tax will go into effect Jan 1, 2020. The Kanabec County Board of Commissioners approved the resolution to implement the tax on Wednesday, Oct. 9.
Based on 2017 taxable sales information from the Minnesota Department of Revenue, the sales tax would generate an estimated $300,000-$330,000 each year to be used solely for transportation projects or improvements.
After hearing from constituents in a public hearing on Sept. 30, commissioners were divided on whether or not to approve the resolution; it passed 3-2.
Commissioner Gene Anderson stated he voted against the resolution, not necessarily because he didn’t agree with the tax, but because he didn’t feel the board had allowed the public enough time to give input.
Yet Commissioner Kathi Ellis argued now was not a time for delay. She expressed a need to implement the tax and do so quickly, citing that the county has already fallen behind in road maintenance.
Commissioner Craig Smith said he voted against the tax because business persons who spoke to him were against it and that the tax would be “just another tax on their customers.”
Commissioner Dennis McNally countered that customers were funding roads in all the surrounding counties, since all but one of the counties surrounding Kanabec County have implemented a 0.5% transportation sales and use tax.
Mille Lacs County - implemented Jan. 2017
Pine County - implemented Jan. 2017
Isanti County - implemented July 2019
Chisago County - implemented April 2016
Aitkin County - no transportation tax
Kanabec County Public Works Director Chad Gramentz said the amount of state aid and other funding allotments aren’t enough to cover the county’s road infrastructure needs.
Gramentz estimated it should cost the county an average of $15,250 per year for each mile of asphalt roadway; gravel roads at $6,467 per mile, per year. Factoring the miles of gravel and asphalt road under the county’s care, compared to what the county receives each year for transportation projects, Gramentz estimated a deficit of approximately $1,800,000 annually.
It is this deficit that first prompted the county to consider implementing a county-wide 0.5% transportation sales and use tax. While the county could bring in more money by raising property taxes, a property tax increase would only impact Kanabec County property owners. A county-wide sales tax would mean collecting tax from all those who make purchases in Kanabec County, like seasonal travelers and visitors.
This locally collected tax applies to the same items and services as the state general sales tax.