WORTHINGTON — Nobles County commissioners on Tuesday will consider options to generate more revenue for road improvement projects.
The options range from increasing the wheelage tax from $10 to $20 per year, instituting a half-cent local option sales tax county-wide and/or levying a $20 excise tax on the sale of new vehicles, which are exempt from the local option sales tax.
The ideas were presented during a board work session earlier this week by Public Works Director Stephen Schnieder. They will be discussed further during Tuesday’s 9 a.m. board meeting at the Nobles County Government Center. A public hearing will be required if commissioners choose to implement a half-cent sales tax or excise tax, but is not necessary to act on a wheelage tax increase.
The county collects approximately $220,000 a year from the wheelage tax it implemented in 2014. An increase would double those revenues.
Meanwhile, a half-cent sales tax could generate more than $920,000 a year, based on gross sales in 2016, Schnieder said. Implementing the tax requires identifying a specific list of projects to be funded. The tax would expire when they are paid for.
Because vehicle sales are excluded from the sales tax, the county could implement a $20 excise fee on vehicle sales. This tax would generate approximately $18,000 per year.
In the last several years, Nobles County has invested heavily in preserving pavement on county roads and state aid highways. The county bonded $9.5 million for road projects in 2017, and spent approximately $4.2 million in paving projects in 2018 and another $3 million in 2019.
Schnieder listed nine roadways he sees as candidates for reconstruction. All of the roads were originally graded in the 1940s or 1950s, and the pavement on them is older, he noted.
“These just take care of roadways that have a bit older overlay on them,” Schnieder said. “They’re narrower roadways without much shoulder. The width doesn’t accommodate the safety for today’s larger ag implements.”
The roads Schnieder identified for reconstruction were:
County State Aid Highway (CSAH) 25 and 35 (Oxford Street) intersection roundabout in Worthington. Estimated cost is $500,000.
CSAH 25 from Oxford Street to Interstate 90, one-half mile, estimated cost is $1 million.
CSAH 4 from CSAH 5 east to Round Lake, five miles, estimated cost is $5 million.
CSAH 6 from Rock County to Minnesota 91, two miles, estimated cost is $2 million.
CSAH 11 from CSAH 6 south to Ellsworth, two miles, estimated cost is $2 million.
CSAH 15 from CSAH 35 north to CSAH 16, nine miles, estimated cost is $9 million.
CSAH 15 from Iowa north to CSAH 35, nine miles, estimated cost is $9 million.
CSAH 16 from Rock County east to Lismore, five miles, estimated cost is $5 million.
CSAH 16 from Lismore east to U.S. 91, one-half mile, $500,000.
Half a dozen optional projects were also identified by Schnieder, including three sections of roadway that were overlaid within the last four years and three sections of gravel road that could be considered for paving.
Of the ideas he presented, Schnieder recommended using a half-cent sales tax to reconstruct CSAH 4 from CSAH 5 to Round Lake, or doing the two projects near Ellsworth (CSAH 6 from Rock County to U.S. 91 and CSAH 11 from CSAH 6 to U.S. 91).
Both the proposed roundabout in Worthington and the reconstruction of Diagonal Road from Oxford Street to I-90 could be done with County State Aid Highway construction funding, Schnieder said. The proposed roundabout likely wouldn’t be put on the list until 2022.
Following Schnieder’s presentation, Commissioner Justin Ahlers said he favored paving a four-mile stretch of Nobles County 54, between CSAH 15 and CSAH 13, which was on Schnieder’s list of optional projects. The road, in southern Little Rock and Ransom townships, is used extensively by gravel haulers from nearby pits.
Ahlers asked if the county would be better off funding that project through a local option sales tax, since the county receives state funding for the County State Aid Highway system.
“I honestly think County Road 54 is a worthwhile project,” responded Schnieder. “I think we’ll have a lot less problems for material haulers.”
Commissioner Gene Metz asked about road widths, and whether improvements would include wider roads.
“We have a lot of roads with no shoulder now,” he said.
Schnieder said roads would be built with 12-foot driving lanes and four-foot shoulders, similar to other roadways the county has recently rebuilt.
Commissioner Matt Widboom, adding up the cost of the roads identified for reconstruction, asked how long the county would want to collect the local option sales tax.
“I would think you go out 10 years at the max,” replied Schnieder, adding that a decade from now, there will be new leadership in the county with potentially different ideas for prioritizing projects. Since the tax will expire when the list of identified projects is completed, the county board in place at that time could prioritize additional roads and host a public hearing if it wishes to renew the tax.
Widboom said he’d like to be aggressive on the projects, and in order to do that, the county would need to find a way to do a bigger bond. Schnieder said an increased wheelage tax could then be used to pay back interest on the bond.
Commissioner Donald Linssen, however, offered caution about implementing the array of taxes that would be added on to purchases.
“I think we have to go with either the $20 wheelage tax or the half-cent (sales tax),” Linssen said. “If people will support this, which I think they will, we have to be reasonable with what we’re doing.
“I just think you’re going to hear a lot if you go from $10 to $20 on the wheelage tax and add a half-cent sales tax,” he added. “I think you’re going to get pushback. There is a breaking point.”
While the half-cent sales tax could be implemented before the start of each quarter, the county would have to act on a wheelage tax increase before Aug. 1 to have it implemented at the start of the next year.
“In my opinion, I’m in favor of moving forward and having the hearing (on the half-cent sales tax),” Widboom said. “We’re just losing time and money.”