St. Paul Mayor Melvin Carter is proposing a new 1 percent sales tax to pay for improvements to roads and park facilities. His office estimates the proposal would generate $1 billion over 20 years for the capitol city.
Mayor Carter said the sales tax would lift the burden off city residents when nonresidents share the cost of maintaining streets and parks.
“If we do it just through our property tax base, then the cost of it will be 100 percent [paid] by our residents. That would impact our low-income residents more,” Carter said.
Carter said streets have been in disrepair for a long time and a large investment is necessary.
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“Our residents and businesses are not the only ones creating the wear and tear on our city streets,” the mayor said.
City council president Amy Brendmoen said the city has a number of institutions like colleges and hospitals which don't contribute to the city's tax base. And she says the new sales tax will help make up for that.
"The cost of maintaining the infrastructure just exceeds what our property tax base can bear," Brendmoen said, pointing out that St. Paul’s taxpayers say they don’t support further increases in the tax levy.
Brendmoen said the Minnesota Legislature in the past has not supported the city with local government aid, or LGA, that is more in line with what the city sends to state.
St. Paul Area Chamber President and CEO B Kyle said the city is facing budget challenges.
“These include additional public safety resources as well as desperately needed infrastructure improvements. So, I understand the thinking. That said, as we approach session, it makes sense to me that LGA modification should be the city’s first priority. St. Paul is sorely underfunded and has been for years," Kyle said in an emailed statement.
The city council plans to add the proposal to its agenda during its Jan. 4 meeting.
The tax increase will need approval from the Legislature before going to city voters as a ballot measure.