The Saint Paul City Council voted 6-1 on January 4 to add an extra 1 percent sales tax to its 2023 legislative agenda. The tax is anticipated to generate about $984 million over 20 years. It is seen as a way to address a growing backlog of street and parks maintenance needs in the city. If approved by the Legislature, the sales tax proposal would be put before voters as part of a citywide referendum.
Ward 7 council member Jane Prince cast the lone vote against the tax, citing several concerns. One is that the city is also lobbying for an increase in Local Government Aid (LGA) dollars this session. She does not want the issues to cancel each other out. Prince also cited complaints about the city’s 15 percent increase in property taxes for 2023. And she said business groups were not given enough time to comment on the sales tax proposal.
Prince agreed that the city has many deferred maintenance needs. She noted that past mayors between 1994-2005 chose not to raise property taxes. Maintenance was often the first thing cut from city budgets. “It was a can that was kicked down the road by mayors for 12 years,” she said.
Prince agreed that the city has many deferred maintenance needs, noting that past mayors between 1994-2005 chose not to raise property taxes. Maintenance was often the first thing cut from city budgets. “It was a can that was kicked down the road by mayors for 12 years,” she said.
Council president Amy Brendmoen said the city should go for everything it needs when making requests to state lawmakers. Other council members said the tax is an opportunity for the city to cover the costs of badly needed brick-and-mortar improvements.
City Public Works director Sean Kershaw and Parks and Recreation director Andy Rodriguez gave council members an overview of the proposed 1 percent sales tax and what it would cover on January 4.
Sales tax would become one of highest in state
Saint Paul has had an additional half percent sales tax in place since 1993. Those funds go toward neighborhood and cultural projects, and RiverCentre improvements. Voters rejected a similar tax in 1999 when city leaders tried to bring a Minnesota Twins stadium here.
The city’s current sales tax is 7.875 percent. In Minneapolis it is 8.025 percent. The proposed 1 percent increase would make Saint Paul’s one of the highest local sales taxes in the state. It would be tied with Duluth at 8.875 percent.
Where the money would go
Mayor Melvin Carter announced the sales tax proposal in late December. He and city department heads outlined where the money would go. That includes spending $738 million to rebuild parts of 25 city arterial and collector streets. Another $246 million would be used to address Parks and Recreation maintenance and facilities needs.
Area streets identified for work include Grand Avenue, Summit Avenue, Hamline Avenue, Shepard Road, Cretin Avenue, Pelham Boulevard, Cleveland Avenue, Marshall Avenue and Kellogg Boulevard.
Parks projects called out include restoration of existing facilities and proposed new ones. Locally they include the Mississippi River Learning Center, downtown river balcony, downtown parks, a multi-field athletic complex, and a new athletic complex and aquatics facilities on the city’s East Side.
Questions raised
Ward 2 council member Rebecca Noecker said she is hearing from constituents wanting to know why other projects cannot be covered. Kershaw and Rodriguez said specific projects have to be spelled out before the tax request can go to the Capitol.
Kershaw said a sales tax does not affect basic needs, such as groceries and clothing. It can be seen as less regressive than property taxes and a more equitable way to address funding needs.
The city’s deteriorating street conditions have been called out in recent reports. “Arterials and collectors are on a 124-year replacement cycle, and it should be 60 (years),” Kershaw said.
Businesses react
The Saint Paul Area Chamber of Commerce, Hospitality Minnesota and other groups are raising red flags about the proposed sales tax increase. They are asking why it was not discussed with them before the mayor unveiled the idea.
Kieran Wells, who owns Wells Pianos at 408 S. Snelling Ave., is among small business owners who are wary of more sales taxes. “I can’t predict whether or not it’s going to be the business killer that I think it is,” he said, “but I can for sure say that it’s not going to be good.”
According to Wells, an average customer purchasing a Steinway piano would save about $450 if he moved his store to Mendota Heights today. “They would save about $1,000 if I moved the store after the tax hike,” he said.
— Jane McClure
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