County adopts wheel tax

On June 16, the Pennington County Commission adopted a wheel tax for $2 per wheel with a maximum of $24 per vehicle.

The vote, which was a 4-1 vote, came after long deliberation on the tax.

“We are talking about this going into effect Jan. 1, 2021,” said Gary Drewes, Pennington County commissioner.

The wheel tax will be used to fund bridge improvement projects in Pennington County. According to information supplied by Drewes, Pennington County has 127 bridges on county roads. Of those, 21 bridges are deemed structurally deficient. A total of 88 bridges will need to be replaced in the next 25 years.

The South Dakota Legislature created the bridge improvement grant fund (BIG Fund) in 2015, which supplies $7 million for local government bridges derived from an increase in license plate fees. In addition to that, the South Dakota Department of Transportation (SDDOT) has used their discretionary funds to add another $8 million to the BIG Fund for a total of $15 million available annually for local government bridges.

In order for the county to obtain this money, though, a wheel tax needs to be in place.

“The main purpose of that was, in our effort working with the legislature and the local governments, the discussion was that we were trying to cut as much red tape as possible from the process of doing road and bridge projects through the (SDDOT),” said Doug Kimber of SDDOT at the June 16 commission meeting. “As such, we were going to then start to distribute your annual surface transportation dollars to each of the counties and cities that receive those funds directly.”

Those projects, Kimber added, were no longer going to be programmed through the SDDOT and, as such, the projects wouldn’t be reported in the SDDOT’s annual, statewide transportation improvement plan and open for public comment.

Creating a five-year road improvement plan was the first requirement to obtain state dollars for BIG Fund projects. The second requirement would be to create a wheel tax.

“Now, with that said, there is no minimum that this program requires for  the wheel tax,” Kimber said. “The maximum is established through the associated laws pertinent to the wheel tax. In order for Pennington County to be eligible to apply and receive a bridge improvement grant, I simply need to check a box that you have a wheel tax in place.”

Again, Kimber added, it does not matter to him what level of wheel tax is in place. All that matters is that there is a wheel tax.

There are additional requirements and criteria that help a county gain points to obtain the money for a BIG grant, Kimber said. Number one is to have a wheel tax in place to receive funds from the BIG Fund.

Pennington County had been putting money into that fund through collecting money for license plates. At this time, though, without a wheel tax, Kimber said Pennington County could not take money out of the fund it had already been paying into.

Commissioner Mark DiSanto had a question about the money being put aside through collecting licence plate fees.

“If we choose to, could we not pay into this fund and keep the money from the county for the licence plate fees?” he asked.

Kimber said the way the state statute is written, there is a certain percentage that gets automatically pulled from the statewide county road and bridge fund and placed into the BIG Fund.

There is not an option, Kimber added, where the county cannot participate in that. It is automatic.

Before Pennington County adopted its wheel tax, it was one of eight counties (out of 66) in South Dakota without a wheel tax, Kimber said.

The biggest impacts for a lack of a wheel tax have been in Pennington and Hand counties, Kimber said, due to the “sheer number of structures you have and the dollar values that are estimated for replacement cost.”

“What we’ve done is estimated the one-time replacement cost of your 127 structures to be just over $70 million,” he added. “Now, if you were to make yourself eligible for the (BIG Fund), the 80 percent match that the BIG Fund will do to make that $70 million, you could receive up to $56.1 million, based on today’s dollars of replacement of those 127 bridges. There is also a separate category we have within the (BIG Fund), so I show here that you could be eligible for another $84 million in preservation funding from that program (preservation funding goes to help existing bridges).”

After more discussion and after hearing from the public, the commission voted 4-1 to approve the wheel tax. DiSanto was the lone “nay” vote.