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Duluth mayor pitches sales tax hike to pay for streets

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A large pothole in the middle of the road in Duluth.
A large pothole in the middle of the road in Duluth.
Derek Montgomery for MPR News file

"I've got a news flash: Duluth streets are in terrible condition." 

That's how Duluth Mayor Emily Larson kicked off a press conference Tuesday announcing a plan to hike the city sales tax 0.5 percent for up to 25 years to help repair the city's 450-mile network of dilapidated streets. 

For Duluth residents, the state of the city's long-suffering streets is no news flash. A recent survey showed more than 90 percent of Duluth residents lacked confidence in the city's streets.  

"It is by far, the No. 1 concern, complaint I get," Larson said. "By far."

The city's streets diminished even further after a revenue sharing deal with the Fond du Luth Casino in downtown Duluth ended. For years that had contributed millions of dollars to the city's streets program. 

Larson is taking her plan directly to residents. She's asked the Duluth City Council to place the referendum on the city's Nov. 7 ballot. 

"It's time for us as a community to prioritize streets," Larson said. "This referendum gives voters a chance to let us know if they want a dedicated consistent long-term streets plan. And I think they do." 

The proposal would generate about $7 million annually, more than tripling what the city currently spends on streets. 

A property tax levy currently raises $2.8 million that's dedicated to streets. But Larson said $1.3 million is used to pay down old bond debt, leaving only enough funding to resurface about two miles of streets a year. 

Duluthians already pay a 1 percent sales tax that St. Louis County recently approved to pay for road repair. If the proposed city-wide increase goes through, Duluth residents would pay a cumulative sales tax of 8.875 percent on most retail purchases. 

If voters reject the referendum, Larson said, residents would likely see cuts in services and higher property taxes starting next year. 

She said a sales tax hike is a more equitable way to pay for streets, since in addition to local residents, it also would tap purchases made by the city's 6.7 million tourists and 35,000 daily commuters.  

The state Legislature ultimately would have to approve a sales tax increase. State Sen. Erik Simonson, DFL-Duluth, said he'd carry a bill in the next legislative session to enact the change. 

"It's no secret that our city roads are in terrible shape," he said. 

Duluth residents will have an opportunity to weigh in at three public meetings, starting Aug. 16 and continuing in September and October, prior to the November vote. 

Larson said she's confident voters will approve it. 

"The strategies we're currently using are piecemeal," she said, "they're a Band-Aid approach. We need to do more and we do need to do better."