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Scott County board delays sales tax decision

Scott County delayed a decision on implementing a half-cent sales tax to pay for transit expansion and 13 transportation projects within its own borders.

For a year, the county has weighed its options for paying for transportation and transit: enact its own sales tax, adopt the sales tax that other metro-area counties have for transit projects, negotiate with the state Legislature for more funding, or do nothing.

On Tuesday, the county board was set to consider a half-cent sales tax and a $20 excise tax on motor vehicle sales within the county to raise $6 million annually for projects. Instead, members moved to pull it from the agenda to allow for more time to explain the proposal to businesses and residents. There was no timeline set for bringing the sales tax discussion back to the board, but the new tax would need to be reported to the Department of Revenue by July 1 in order to go into effect this year.

If the tax is enacted, about $1 million per year would go toward transit operations to pay for expansions of the fixed route bus service, reverse commute, local service and Dial-a-Ride. The remainder would be used for 13 road projects including grade separations, interchanges, frontage road systems and capacity expansions on county- and state-owned roads.

The list was generated through recommendations from local governments and other state agencies, including the Minnesota Department of Transportation. It prioritizes projects on inter-regional corridors, like Trunk Highway 169 where capacity expansion on the Bloomington Ferry Bridge would alleviate congestion, and improved connectivity and capacity on other principal arterial roadways. The tax would sunset once the 13 projects are completed.

Many, including the Shakopee Chamber of Commerce, are in favor of the sales tax because it would be used exclusively within Scott County and not applied toward other regional needs.

Scott County declined to join the Counties Transit Improvement Board, a joint-powers board formed in 2008 that pools money from a quarter-cent sales tax and $20 motor vehicle sales tax in five metro-area counties for regional transit projects. Hennepin, Ramsey, Washington, Dakota and Anoka counties are current members. Carver County also did not join, but both Carver and Scott counties have non-voting members on the board.

A legislative change in 2013 allows counties that aren’t members of the Counties Transit Improvement Board to enact their own sales tax and apply it to local needs. Twelve counties throughout the state — most in Greater Minnesota — have enacted the sales tax to date, according to the Association for Minnesota Counties.

Compared to joining CTIB, the county sales tax will make more of an impact to the businesses and residents that have invested in Scott County, said Angie Whitcomb, president of the Shakopee Area Chamber of Commerce. While the chamber’s members are generally “tax averse,” they are in favor of raising revenue if it stays in the county to address local needs, she said.

“Light rail and transit in greater metro isn’t going to help us get workers down here,” Whitcomb said. “We have pressing transportation issues down here that are impacting our companies’ ability to function at appropriate staffing levels.”

Republicans in Scott County have started to push against the tax — claiming residents are already burdened.

“Scott County Commissioners are threatening to take even more of people’s hard-earned money through these regressive local tax hikes. These taxes are especially harmful to retirees and others on fixed incomes,” the Scott County Republican Party said in a release.

Not all of the tax burden will be borne by the county’s businesses and residents. About 22 percent of the revenue generated will come from Scott County’s 10 million annual visitors to attractions like Valleyfair, Canterbury Park and the Renaissance Fair, according to county estimates.

Surprisingly, many residents were in favor of the tax for increased transit service, county transportation manager Lisa Freese told the board earlier this month. Possible transit expansions funded through the sales tax include weekday, evening and weekend bus service from northern Scott County to the Burnsville Transit Station and to the Eden Prairie area.

Dial-a-Ride service, a curb-to-curb ridesharing service for areas without local bus service, could also be expanded to reduce the number of denied requests, Freese said. The county is also collaborating with MnDOT and the Metropolitan Council to study bus rapid transit options on Highway 169 from Shakopee to downtown Minneapolis. A BRT project isn’t specifically listed in the county’s outline of projects to be funded with the sales tax, but the $1 million annually in transit funds can be used for operations and expansion.

If approved, the sales tax could be imposed this October and all of the projects could be completed within the next 10 to 20 years. The projects potentially funded through the tax are not currently ranked, but one or two could be included in the county’s latest transportation improvement program this fall, Freese said. Projects would be selected based on need, project readiness and ability to leverage other funding sources.

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