Like it or not, St. Paul needs a new sales tax to fix roads

The word on the street: There’s a pothole on Lexington Parkway the size of a bowling ball. So at least when commenters aren’t complaining about snow plowing, the Como Park Neighbors Facebook group is abuzz with complaints from people needing car repair thanks to this crater.

If you’ve lived in St. Paul for very long, this isn’t a surprise. Every winter, pavement conditions deteriorate. Each spring, drivers anxiously wait for temperatures to rise, so that the city’s asphalt plant can start filling the potholes. And each year it gets worse. 

When Mayor Carter’s office proposed a new citywide, one-percent sales tax earlier this month, the vast majority of which would go to street reconstructions, it was a tacit admission that the city’s Public Works department can’t keep up. The tax proposal, passed on a 6-1 vote by the City Council, now goes to the State Legislature for approval, at which point it would be placed before voters this November. 

It’s been an open secret that St. Paul’s street maintenance budget was underfunded, through multiple mayoral administrations going back decades. During one recent meeting, retiring City Council Member Jane Prince suggested that the roots of street decline went back into the 1990s, when a string of conservative mayors steadfastly refused to raise the property tax levy.

The road maintenance budget took a further hit in 2014, when then-mayor Chris Coleman, fed up with complaints about pothole’d main streets, diverted money from the city’s residential reconstruction program into repaving the so-called “Terrible 20.” At the time, the best case scenario was that the investment might stretch the lifespan of the city’s worst streets by about ten years. 

Ten years later, this puts St. Paul in a bind. The city has repeatedly raised the property tax levy in the past few years, thanks in part to a successful lawsuit by a group of nonprofits that ended an assessment program that had funneled millions into the city’s street budget. There’s little appetite to farther raise property taxes for basic city services, and city leaders are desperate to find another way.

Enter the new sales tax proposal.

Delaying the inevitable

With road maintenance, there’s a tradeoff between short-term and long-term investment. More superficial fixes, called “mill and overlays,” run about $300,000 per mile, but don’t last very long. More importantly, they don’t fix the underlying problem in the degrading road foundation, which only continues to get worse. On the other hand, the new asphalt looks nice for a few years. 

By contrast, street reconstructions are very expensive — around $1 to $3 million per mile, and sometimes more — but the infrastructure fixes last for decades. Crews dig up everything under the surface, including myriad utilities, and fix everything for the long-term. In a perfect world, most streets should be reconstructed every 60 years or so.

This poses a problem for St. Paul, because, as Public Works’ Director Sean Kershaw explained earlier this month, St Paul is on a 124-year reconstruction cycle. After years of delaying the inevitable, the tension between short-term political calculation and long-term investment has finally come to a head. Mayor Melvin Carter inherited a legacy of deferred maintenance, passed down from administration to administration, and finally a mayor has a proposal to do something about it.

This is not a place that cities want to find themselves. Even though Minnesota exempts food and clothing, sales taxes remain regressive. It’s far better to raise revenue in other ways, ideally through state aid (funded by progressive income taxes), growing the city’s tax base (something Minneapolis has been much better at doing than St. Paul), or a targeted approach that aligns with the city’s goals. For example, charging for parking at regional destinations would be nice. 

Instead, we have a “least worst” situation. The sales tax would raise about a billion dollars over the next twenty years, doing wonders for St. Paul reconstruction founding. It would fix the massive pothole backlog into which generations of city leaders have dug themselves. 

The problem is that Minnesota state law does not make it easy for cities to enact sales taxes. Due to the legislative specifics, taxes must be for a specific period of time and earmarked for regional projects. That’s why the St. Paul Public Works Department unveiled a specific (and geographically dispersed) list of street reconstructions, along with some notable investments in city parks, like the proposed downtown River Balcony.

If the Legislature approves the sales tax, the St. Paul City Council will put it on the November ballot, at which point St. Paul voters have the final say. With a lot of open City Council seats, the year’s election will likely be a higher turnout affair, though the near unanimous City Council approval of the tax proposal earlier this month suggests that tax itself might not be controversial. 

There’s still a slog at the Legislature. Historically, state lawmakers have not been generous when allowing cities to levy sales taxes. If St. Paul gets permission to move forward, it’ll match Duluth for having the highest citywide sales taxes in the state (Minneapolis has a more complicated taxation landscape, with specific downtown-only taxes that fund things like the downtown Convention Center).

In other words, expect a rocky road. But make no mistake, St. Paul needs this money, and this seems the best way forward. If it doesn’t work out, the bumps in the road will rapidly get worse.

Editor’s note: This story has been updated to remove a reference to the regressiveness of sales taxes. In Minnesota, after the application of the state property tax refund, sales taxes are significantly more regressive than property taxes.