St. Paul voters passed a 1% sales tax increase Tuesday to generate funds to improve city infrastructure, notably for roads, bridges and parks and recreation. The measure passed 60% to 40%, with almost 29,000 people voting for it.
It’s one of 36 cities and counties that received permission from the Legislature to propose sales tax increases. Several of those, including Rochester, Bloomington and Golden Valley also passed sales tax increases or extensions on Tuesday.
Bloomington is among one of the state’s larger cities that voted for an increase. Bloomington’s increase of .5% will go towards a community health and wellness center, improving the ice arena and the Nine Mile Creek Corridor.
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Rochester’s ballot had a question asking residents if they’ll extend its current sales tax for an additional six years to pay for flood control and water quality, street construction and a sports and recreation complex, among some other things. The measure passed with 53.6% approval.
Golden Valley and Mounds View both had proposals for increases of more than 1% on their ballots. Golden Valley passed its measure, while Mounds View voters voted no on the increase. Marshall passed a sales tax extension of .5% on its ballot, to help construct a new aquatic center in the city.
Who supported the St. Paul measure?
Six of the seven current council members in St. Paul backed the sales tax proposal – including three of the incumbents, Rebecca Noecker, Mitra Jalali and Nelsie Yang, who were all re-elected. The tax will generate about $984 million over the next 20 years for roads, bridges, and parks and recreation.
A majority of the funds, about $738 million would go towards roads and a quarter would be allocated to parks and recreation.
Supporters of the proposal like Faith in Minnesota, a political faith-based organization, believe it’s a necessary solution to improve the living conditions in the city.
“Our roads, like our schools, parks and libraries are a part of the collective effort we make to care for our neighbors. We have another chance this election to work together to create a healthier and more connected St. Paul,” said Vivian Ihekoronye, an organizer with Faith in Minnesota, at a press conference last week expressing support for the sales tax increase.
Ihekoronye was joined by business owners in St. Paul, like Wes Burdine of The Black Hart of Saint Paul, and council member Jalali.
Jalali expressed her support for the sales tax, saying that in the five years she’s represented Ward 4 she’s noticed an underfunding of public infrastructure. Jalali said the sales tax would be more equitable compared to the alternative of a property tax increase because many people who benefit from the roads and parks in St. Paul are not actually residents of the city.
“The alternatives are to actually ask for our residents only to pay the cost for that in property tax, which is millions and millions of dollars, which is not right, fair or sustainable,” Jalali said at the press conference. “It’s just not tenable or right to ask our residents alone to be taking up the cost of these regional assets from our road network to our park system and trails when we know that thousands and thousands of people all around the state are using them.”
Will higher taxes turn business away from St. Paul?
Those who opposed the sales tax increase, like the St. Paul Area Chamber, believe that such a tax will have negative impacts on businesses, consumers and the economy. The sales tax won’t apply to household items like clothing, groceries and everyday necessities, but would increase the regular sales tax percentage to 9.875%.
“I think businesses, especially retailers, hospitality, small businesses, are just concerned about having what would be the highest sales tax rate in the state,” said Amanda Duerr, the vice president of government affairs for the St. Paul Area Chamber. “Being located where we are, the possibility of consumers choosing to go elsewhere to make their purchases, when you can cross the city line pretty easily and save percentage points off your purchase. I think there’s a fear that folks will do that, especially when it comes to some of those larger purchases.”
The St. Paul Area Chamber consists of 1,700 members and affiliates, including the Minnesota Black Chamber of Commerce and the Minnesota Hmong Chamber of Commerce. A survey of its members found that around 73% opposed the sales tax increase, 16% supported it and 12% were unsure.
The group has been a vocal opponent of the increase since it was first introduced in the legislature. When asked what the chamber would ask of the city if the measure passed, she said she’d want improvements to other road reconstruction projects – not just the 44 miles that are included in the ballot measure.
“If you’re not on one of those 44 miles, you’re still gonna be subjected to the business as usual. They always talk about the road reconstruction cycle and needing to replace every so often beyond these few identified streets, there hasn’t been a plan released in terms of how we’re going to address the wide-scale needs,” Duerr said.
Jalali feels that a sales tax increase is the more equitable way to pay for these improvements – since people who use the roads are often residents of St. Paul.
“We know that the whole state of Minnesota is coming to visit our capital city, our assets,” Jalali said. “We want to ask that when folks are visiting and making purchases at the (Minnesota) Wild game or a conference at the RiverCentre … to coming to the zoo or the Children’s Museum or any of the things that people use that are unique and special to St. Paul, that they are paying into the cost of maintaining that infrastructure. That’s what this is about.”
While several cities passed sales tax increases across the state on Tuesday, the remaining municipalities that received permission from the legislature will most likely be voted on during the 2024 general election, according to Nathan Jesson, the intergovernmental relations representative for the League of Minnesota Cities.
Editor’s note: The subhead and text in this story was updated to reflect Rochester and Marshall’s votes were for tax extensions, not new tax measures.