Meeker County holds public hearing on proposed half-cent transportation sales tax; decision tabled to Feb. 17

Meeker County commissioners held a public hearing Feb. 3 on a proposed local-option transportation sales and use tax that staff said would fund construction projects identified in a project list attached to any enabling resolution.

Phil Schmalsen, the county works director, told the board the tax under discussion would be a half-percent (0.5%) levy on taxable sales in the county and estimated it could generate about $1.3 million a year. "A half percent sales tax would be about $1,300,000," Schmalsen said, noting the estimate includes in-person and online sales and that vehicle purchases would be exempt under the program. He also cited a commonly used estimate that 35%–45% of sales-tax receipts in a county with regional shopping draw come from non-residents, and said a consultant study could refine that figure.

Schmalsen framed the tax as a construction-only revenue source that could be spent only on the projects listed in any approving resolution and that the county would still pursue state or federal grants for other work. He warned that construction costs have outpaced dedicated funding sources and presented an "unfunded projects" list the department would pursue if new revenue were available.

Commissioners asked clarifying questions about the estimate sources and the timing for implementation. Staff said the county must notify the Minnesota Department of Revenue at least 90 days before the intended start date and that collections must begin on the first day of a quarter; if the board delayed action until mid-February it could still meet a July 1 start, but longer delays would push implementation into the next quarter and cost three months of revenue.

Public comment was solicited but none was offered during the hearing. Several commissioners expressed reluctance to add a new tax immediately; others said neighboring counties' adoption of local-option taxes has left Meeker at a competitive disadvantage. One commissioner raised concerns about the legibility of the published notice and asked staff to review outreach materials.

After discussion, the board voted to table the resolution to the Feb. 17 meeting so members could review additional information and public feedback. The county will next consider a resolution and a project list at that meeting if it proceeds.