MOORHEAD – Come Jan. 1, drivers here and across Clay County will be required to pay a new $10 fee when they renew their license tabs.
The so-called “wheelage tax” was passed unanimously by Clay County commissioners on July 16 in an effort to bolster the county’s road repair funds.
Of the 87 counties in Minnesota, 40 have passed the new wheelage tax, which has been available to the seven-county Twin Cities metro area since the 1970s. It was approved this year by the Legislature for statewide use.
Counties have until Thursday to inform the state that they have passed a wheelage tax if they want to institute the new charge next year, said Julie Ring, legislative coordinator for the Association of Minnesota Counties.
Ring said the tax in Clay County could draw in an estimated $460,000 a year.
The only other North Dakota/Minnesota border county to pass a wheelage tax is Polk County, according to Ring’s notes. She estimated the tax would earn Polk $300,000 a year.
The Association of Minnesota Counties pushed hard for the wheelage tax, Ring said.
“I think every county in Minnesota would say that they do not have adequate funding for their transportation system,” she said.
The Moorhead Business Association opposes the wheelage tax because of how it can negatively affect business growth, said Executive Director Chuck Chadwick.
“It’s just not a good idea,” he said. “Even though it’s ten bucks, (we’re) so sensitive to North Dakota competition.”
Ring and Clay County Administrator Brian Berg said the counties need more options for gathering funds to keep roads up to snuff. In Minnesota, the only revenue source counties have is property taxes, Ring said.
“There’s been a lot of pressure on property taxes, a lot of discussions of ways to relieve propriety taxes, and so from our perspective this gave counties another option for revenue for those roads,” she said.