By Sara Strong
Rock County's possible gravel tax became an agenda item for area counties as Rock, Pipestone and Nobles counties met by interactive television Tuesday.
Gravel extractors have expressed concern that if Rock County is the only one that imposes a gravel tax, pit owners will be forced to pass the price on to consumers. They fear neighboring county pits will receive low bids on construction projects.
Commissioner Ken Hoime said, "We feel that in Rock County we have a valuable commodity that's going out of the county as well as out of the state."
The gravel tax would be a production tax - the extractor pays quarterly based on the amount of gravel mined. The law was modeled after the iron ore tax.
Rock County's gravel pits could bring in as much as $40,000 to $50,000 in tax revenue.
So far, gravel pit owners have voiced the only objection to the tax.
Rock County townships have met to discuss it and support it, because townships would get a portion of the tax to help pay for roads in their small budgets.
State law calls for the county to receive 60 percent of the tax revenue, the townships to receive 30 percent and the remaining 10 percent to go into a fund for reclaiming gravel pits when they are abandoned.
Townships and the county discussed the tax and agreed on a further split. Of the township portion of the tax, half would be divided among the 12 Rock County townships and the other half would go toward the townships with active gravel pits.
The gravel tax was first discussed as a way to recoup costs of wear on roads used by heavy gravel equipment. It also considers that gravel is a resource that, once gone from the county, canÕt be replaced.
If a production tax is imposed, pit owners fear they won't be competitive against others in the region. But the county board said gravel demand isnÕt going anywhere but up, even if miners have to increase their prices.
In fact, the Twin Cities area has been facing a gravel shortage and is seeing increases in construction. Sioux Falls, S.D., also has a high demand for gravel.
For the first time, this year, the state is giving all counties the option of taxing gravel extraction rather than granting it on the previous county-by-county basis.
Currently, 23 counties have a gravel tax, which generates thousands, and in some cases millions of dollars for those counties.
Hoime said he understands the reluctance of other counties to implement the tax, but still feels it's right for the region.
"I'd like to see other counties do it at the same time. We work as a district in other things, whether it be the [Regional Development Commission] or whatever. But it's up to each county to decide."