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Half-cent sales tax kills $10 wheelage tax: Beltrami commissioners look at long-term plan to fix county roads

BEMIDJI — Yes, new taxes?

Beltrami County will be implementing a new sales tax to help pay for county road repairs. The half-percent transportation sales tax follows the incorporation of a $10 wheelage tax earlier this year for 2014.

However, by adopting the resolution that adds the sales tax, the wheelage tax now will dissolve in 2015.

During a public hearing Tuesday, commissioners heard from five people who supported the tax. One supporter, Tim Lutz, superintendent of Kelliher school, said the enactment of the tax was courageous and would be a benefit to the students.

Rich Siegert, of Bemidji, spoke as “semi-opposed” to the tax with concerns it may impact tourism to the area. Siegert said more funding from the state and reducing the percentage to a quarter-percent transportation sales tax are potential alternatives to the half-percent tax.

Commissioner Jim Lucachick was in favor of lowering the half-percent to a lower number.

Commissioner Jack Frost said he would hate to have the tax negatively impact tourism.

“My concern is the state is looking at the counties now to see what they do. How many are going to adopt a sales tax? How many are going to adopt a wheelage tax? I really strongly feel that we need to really pursue a transportation bill at the state Legislature and we need to lobby for that,” Frost said.

Commissioner Joe Vene agreed that pressure must be applied at the state level for a competent transportation package.

“In the meantime, we need to fix our county roads and I hope that fixing the county roads will also be attractive to the population, to the tourists and vacationers that come to the county,” Vene said.

County Administrator Kay Mack and County Highway Engineer Bruce Hasbargen presented information meetings in Pinewood, Bemidji and Blackduck before Tuesday’s hearing. In the past, funding to repair roads was taken from property tax levies and County State Aid Highway funds. State money has continually fallen short.

Were the tax not enacted, property taxes could have been adversely affected. The county will be using $6 million in reserve funds to help repair county roads. Under the new resolution, a $20 excise tax will also be added to motor vehicle purchases and transfers.

“In 2013, the Legislature actually acknowledged that funding was falling short on roads,” Mack said. She added that it is not a common practice for the federal government to allow a county to pass a tax, such as the wheelage and sales taxes, without seeking special legislation. Before this past legislative session, only counties in the Twin Cities metro area could enact wheelage taxes.

Commissioners voted unanimously to adopt the resolution.

Budget and Levy

Beltrami County Commissioners held the annual Truth in Taxation public hearing following Tuesday’s regular board meeting.

Mack provided an overview of the 2014 budget and levy. The county budget includes $60 million in revenues and $70 million in expenditures. Use of reserve funds has been built into the balanced 2014 budget.

“Property tax levy becomes the amount that really balances our budget,” Mack said. “Expenditures not covered with outside revenues is paid through property tax levy.”

The property tax levy is expected to remain the same for 2014 as it has the past two years: $17,486,013. The tax levy covers 24.72 percent of expenditures.

Board chairman Richard Anderson said it was notable that the county had gone with a zero increase for the past three years. He also questioned if residents would see a slight decline in their county tax.

Mack said that the reduction would be so slight that it may not be noticeable. She explained that because valuation of property changes so often, it is difficult to say whether a person would see a decline. If the value on a property stayed exactly the same a very slight decline would be seen, Mack said.

“The only thing that a county board actually does to affect how much tax someone pays to the county is adopt a levy,” Mack said. “The valuation is looked at by the assessor and a mass appraisal system...Somebody’s property value going up or down does not get the county more money.”

The budget and levy will be finalized at the Dec. 17 county board meeting. Budget books are available on the county’s website ( and in the treasurer’s office at 701 Minnesota Avenue NW.

Crystal Dey
Crystal Dey covers crime, courts, tribal relations and social issues for The Bemidji Pioneer in Bemidji, Minnesota. Originally from Minnesota’s Iron Range, Dey has worked for the Echo Press in Alexandria, Minnesota, The Forum in Fargo, North Dakota, The Tampa Tribune in Tampa, Florida, the Hartford Courant in Hartford and West Hartford News in West Hartford, Connecticut. Dey studied Mass Communications at Minnesota State University Moorhead with an emphasis in Online Journalism. Follow Crystal Dey on Twitter @Crystal_Dey.
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