Posted: 5/16/07
Final Draft - by Cliff Buchan
Property taxes socked for roads
At more than three bucks a gallon for gas, there aren’t many of us who relish forking out more in the way of tax dollars for gasoline purchases. Imagine the pain for the big SUV owners who can fork out $100 or more to fill the tank.
This newspaper through its editorial board has supported a gasoline tax as a means of raising revenue to help fund road, bridge and transit projects in the state.
It’s not a popular tax and one that is opposed by most public opinion surveys and has a governor’s veto as reinforcement.
Sometimes blind stubbornness is the driving force that wins out. Even if it may be wrong.
A published report Sunday on figures from the Minnesota Department of Finance shows why that reluctance to go along with a hike in the gasoline tax may be ill-founded.
According to the report, local property taxes levied for roads and bridges in the state have doubled since the mid-1990s. The total for 2006 was $1.6 billion, meaning that property taxes have become the single largest method of funding road projects in the state.
The total of property taxes is nearly equal to all funds from the state and federal governments combined.
Increased taxes on gasoline may not be popular but they are an avenue that has be explored.
The state gas tax has not been increased since 1988. When that is coupled with flat levels of funding from fuel and vehicle taxes, the pressure is applied to the counties, cities and townships.
“It bothers me that we have to use property taxes to do it,” said Dennis Hegberg, the Washington County commissioner who represents Forest Lake and the northern territory of the county. In the current $80 million county bonding bill recently approved, $12 million has been earmarked for W. Broadway improvements in Forest Lake.
It’s the county’s share of a project with $22 million in total costs.
For its general levy, the county in 2006 used property taxes of just over $5 million for roads.
In 2007, the budget is just over $6 million.
The bond debt is a separate category supported by property taxes.
How will the county make bond payments? If you answered property taxes you would be right.
This is not to say that some level of property taxes would not be needed if additional state and federal dollars were available.
But it is clear that the failure of the legislature to adequately fund roads and bridges and transit projects is having a negative impact on property taxes.
In Chisago County last year, some $7 million of county levy dollars were used to upfront the costs for the new interchange at CR-17 and I-35 in Lent Township.
It was a priority that the county and township wanted and officials did what was necessary to serve the area. Federal funds will repay the county over time but it is another example of property taxes supporting road work.
The state’s inability to find the revenue streams is in reality a double negative.
The state runs the risk of losing matching federal funds when the state can’t come up with the funds needed to match the federal dollars.
And again, the counties often fork over their share in form of property tax dollars to capture federal dollars.
It would seem property taxes could have a better use in terms of providing services to the public.
For rapidly growing counties like Washington County, there will no doubt be pressure to use levied funds for road projects.
The other question, of course, is how local governments will spend and budget if additional state revenues become available. The legislature is keen on reducing property taxes and rightfully so as they have shot up in recent years to offset cuts in state aid.
If the trade off of additional taxes, such as the gas tax, to produce a reduction in property taxes is not successful, all will be in vain.
The bottom line, however, is that if people are tired of being stuck in traffic and burning up costly gasoline while sitting still, it is time to produce the funds that will improve roads and develop alternative forms of transportation.
It really comes down to a pay-as-you-go system for those using roads or collecting “credit card” debt that must be paid in the long run.
It is that or slapping the cost on property taxes.
Forest Lake Times
P.O. Box 218
880 SW 15 St.
Forest Lake, MN 55025
651-464-4601
Fax 651-464-4605