If the Mayo Clinic is to expand in Rochester, city and county residents must contribute a larger share of the $500 million needed for public transit and other improvements, state lawmakers said this week.
Democrats in the Minnesota House are now offering $338 million, about $200 million less than Mayo Clinic has requested in state funding. That means local residents and Rochester visitors may see a number of new taxes to foot the bill for Mayo's future growth.
In their latest response to the hospital system's plan, state lawmakers have asked Rochester to more than double its share of local taxes committed to the project, bringing the city's contribution $128 million.
The new tax money could come from an extension or increase of the local sales tax, a food and beverage tax, a lodging tax and an entertainment and recreation tax.
The plan would also give Olmsted County the authority to raise a local sales tax, although it's unclear if that would be limited to certain items. To help pay for a proposed $119 million transit line, the county could charge a new wheelage tax — a fee on each licensed vehicle. Until now, the county has not earmarked any funds to the proposed expansion plan.
Olmsted County Board Chairman Jim Bier supports the measure, but expects some pushback from county residents.
"People don't like taxes," he said. "I mean, I don't think that's any big secret. But I think generally people will see that it's a good thing. Mayo's what drives the economy down here."
Bier said he supports a tax on vehicles kept in the county because it would be collected when a vehicle is registered and is dedicated entirely to funding transportation projects.
"People don't like taxes. ... But I think generally people will see that it's a good thing."
"I would suspect that a wheelage tax would have a good chance of passing the Olmsted County Board, just for the fact that we've got to fund these transportation projects, which mostly means roads, but it can mean buses, bike lanes, rail, all that," he said.
Mayo Clinic and city officials know that traffic is one of several major obstacles they face in handling an increase in the city's population and Mayo patients. Already, traffic in downtown Rochester is congested and city planners say moving tens of thousands of more people around the city will continue to be a challenge.
Mary Kuisle, who has managed her family's business, the Sunny Market Grocery Store, for three decades, has seen Rochester grow up around her.
"As things kept getting bigger and bigger and hotels kept going on, [I] didn't really like it, but we adapted," she said. "We live with traffic."
Kuisle owns the grocery store and motel across a busy, four-lane street from Saint Marys Hospital —the larger of Mayo's two hospitals. It's five blocks away from the heart of downtown Rochester and Mayo's other major facilities, Rochester Methodist Hospital and the Gonda building.
Outside Kuisle's store, about 15,000 cars, buses and hotel shuttles drive up and down Second Street every day, according to city estimates. At rush hour, Kuisle said, traffic is slowed by gridlock.
Inside Kuisle's store, the shelves are stocked with ready-to-eat meals, dried fruit and travel-sized toiletries that cater to Mayo patients and their families.
One of her customers, 63-year-old Don Nelson of Detroit Lakes, also sees traffic as a challenge. Nelson, recently visited Rochester with his wife, who came to see a doctor at Saint Marys hospital, and daughter, who went to the Gonda building for treatment.
"I don't know this city so I don't want to drive and I don't want to lose my parking spot at the hotel," Nelson said. "Anything that they can do to improve transportation between the hospital and the clinic would be money well spent."
Mayo Clinic and city officials know that traffic congestion is one of several major obstacles they need to deal with to handle an increase in the city's population and clinic patients.
With about 107,000 residents, Rochester is already the state's third-largest city. Officials estimate the city will gain an additional 32,000 people in the next two decades.
In its proposed expansion plans, Mayo Clinic earmarks $264 million for transportation projects that include downtown streets and sidewalks, skyways and subway and a bridge over the Zumbro River. Officials estimate an additional $586 million will be needed to cover transit costs, including bus system upgrades, a rapid transit system and a downtown streetcar.
For years, city officials have studied future rail services in and around the city as part of the Rochester-Olmsted Council of Governments 2040 Transportation Plan.
One of the projects under review is a rail-based, streetcar system that would connect Saint Marys Hospital to the downtown area, according to the city's long-range transportation plan.
Map: Proposed streetcar system
A street car system could help alleviate traffic by making frequent stops along a designated route, said Dave Pesch, principal transportation planner for Rochester and Olmsted County.
"So in other words, a lot of people who are driving into downtown and parking ... in the future might be driving only to the edge of the city and parking in park and ride lots and maybe taking [bus rapid transit] into the city," he said. "Or driving in closer to the city and maybe taking trolleys into the downtown area."
Pesch said building rail lines might have other benefits that could stimulate more development along the corridor.
"Retailers and shop owners and motel and hotel shop owners and office developers and so forth see the tracks and see permanence," he said. "And when they see that permanence, they're much more willing to build and development along the tracks."
Ultimately, market forces will decide which projects get done and which don't, said Dr. Brad Narr, a Mayo Clinic spokesperson for the proposed expansion plan. He said the hospital system wants lawmakers to fund its request to help position Rochester as a destination medical center.
"We're a big part of the city of Rochester right now," said Narr, chair of the clinic's anesthesiology department. "We just have to make sure we continue that relationship and move the whole process forward."
But Mayo's proposal is far from being a done deal. Elected officials in Rochester and Olmsted County still have to support the proposal. And it's unclear how much city and county residents will be willing to pay in additional taxes.