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Scott County approves sales tax

Cali Owings//May 15, 2015

Scott County approves sales tax

Cali Owings//May 15, 2015

In a defensive move meant to ensure sales tax revenues stay in the county, the Scott County Board on Tuesday voted to enact a half-cent sales tax to fund transportation and transit for the next 10 years.

Facing pressure at the state Legislature, the board agreed in a 4-1 vote that it was better to enact its own sales tax to be used within the county’s borders rather than contribute more to a metro-wide sales tax pool for transit projects. A half-cent sales tax and a $20 excise tax on vehicle purchases in the county, which would go into effect this October, are expected to raise $6 million per year.

A provision in the transportation bill, currently being debated in conference committee, would hike the metro-area sales tax for transit and could require that Scott and Carver counties join the Counties Transit Improvement Board. The board, formed in 2008, currently collects a half-cent sales tax in Anoka, Dakota Hennepin, Ramsey and Washington counties. Carver and Scott counties declined to join when it was formed but are non-voting members of the joint-powers board.

“Every year, they have moved closer and closer to including us in the metro-wide sales tax,” Commissioner Jon Ulrich, who chairs the county board, said at Tuesday’s meeting.

If the three-quarter-cent sales tax is enacted at the state level and includes the seven-county metropolitan region, another provision in the transportation bill would allow Scott County to retain its half-cent sales tax locally while the remaining revenue flows to the metro-wide pool.

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.

“It stays here and I think that’s important,” said County Commissioner Barbara Marschall, who represents Prior Lake and Shakopee and voted in favor of the sales tax.

Unlike the transit sales tax collected by the CTIB, Scott County will be able to use its revenue on a shortlist of 13 road projects.

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 tax collection would sunset once the projects on the list are completed or December 31, 2022 — whichever is sooner.

Even without pressure to join CTIB, members of the Scott County Board argued in favor of the tax because raising the same amount of revenue for infrastructure through other means would be more burdensome to county taxpayers.

In order to raise the same amount of revenue, the county would have to raise its property tax levy by 10 percent, said Lisa Freese, transportation program director for the county. With the sales tax, the county estimates that about 30 percent of the revenue will be generated through visitors to attractions like Valleyfair, Canterbury Park and the Renaissance Fair.

Without action, bottlenecks throughout the county will get worse and impede economic development and job growth, Ulrich said. He estimated there had been more than $450 million in economic development in northern Scott County over the last five years.

“We have to prepare for the future and make sure our corridors are free-flowing and they don’t choke off jobs and economic development,” Ulrich said.

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