History: Minnesota Statutes §163.051 authorizes the board of commissioners to levy by resolution a wheelage tax on each motor vehicle. From 2014 through 2017, the wheelage tax rate was $10 per year in each county that authorized the tax. After January 1, 2018, each county may authorize a rate of up to $20 per year.

In 2013, the Hennepin County Board of Commissioners authorized a wheelage tax rate of $10 per year effective January 1, 2014 (Resolution 13-0248R1). Since then, construction costs to build and maintain the county’s system of roads and bridges have grown significantly and the state’s support for CSAH through the highway user tax distribution fund has not kept up with the needs of system.

At the current rate of $10, the Hennepin County Wheelage tax generates approximately $10 million per year. With these funds, the county has been able to complete the following:

• Convert 144 turn signals to allow flashing yellow arrows
• Install 193 video cameras at key intersections

• Replace 10 temporary wire-span signals with permanent pole signals
• Convert 66 lane miles of roadway to grooved-in striping  

• Add 321 lane miles of bituminous pavement crack sealing to the asset maintenance program
• Augment the pavement mill and overlay program with 318 additional lane miles

Current Request: This request is to approve the following actions:

1. Authorize and impose a wheelage tax rate of $20 per year on each motor vehicle that is kept in the county and that is subject to annual taxation and registration.
2. Request that the state registrar of motor vehicles collect the tax.
3. Direct the county administrator to certify the tax to the state registrar of motor vehicles before August 1, 2019.    

Public Works proposes to use the additional $10 million in wheelage tax revenue as follows:

• Fund $6.5 million in additional preservation and maintenance activities:    
  • Medium-depth mill and overlay
  • Chip seal
  • Texas underseal 
  • Cold-in-place recycling
  • Full-depth reclamation
• Reduce property tax revenue by $5 million
• Fund $3.5 million for design and engineering of CSAH roads, thereby increasing funds available for projects in the capital improvement program.

Impact/Outcomes: An increase in the wheelage tax will support the county’s vision to move people and goods easily and safely within the system of roads and bridges. The increase will reduce dependency on property taxes and more directly tie funding for roads and bridges to users of the system.