As he sat down to testify at the Minnesota Capitol on Tuesday, St. Paul Mayor Melvin Carter joked that his pitch for collecting a sales tax in the capital city began during the morning commute — when lawmakers from across the state could see firsthand the dire need for repairs on heavily potholed streets.
"An estimated 7 million visitors come from all over the region to St. Paul each year to experience our businesses, museums, attractions, shopping, restaurants, entertainment districts," Carter told lawmakers. "A sales tax proposal uniquely invites those avid users of St. Paul streets and parks to be a part of the solution to maintain them."
St. Paul is among a record number of local governments in Minnesota — at least 31 cities and five counties — that are seeking permission this year from the Legislature to put sales tax requests before voters. The local taxes are becoming an increasingly popular way for cities and counties to share the costs of capital projects and infrastructure improvements with out-of-town visitors.
Tax proposals on the table would funnel billions of dollars to projects across the state, from libraries to jails to athletic complexes. Most amount to a half-cent on top of the 6.875% sales tax the state already collects, though that can vary. St. Paul's $984 million proposal, which would fund street and park maintenance with a 1% sales tax over 20 years, is the largest. Smaller requests would pay for amenities including campgrounds and trails in outstate communities.
The uptick in proposals is raising questions at the Legislature about who should be responsible for funding amenities that may have a regional draw. Critics say there are fairer ways to fund capital improvements, while proponents argue that local sales taxes empower voters to have a say in how their money is spent.
"It truly is a philosophical debate," said Gary Carlson, lobbyist for the League of Minnesota Cities. "It's a tax policy debate about how to best finance these projects."
Searching for solutions
The influx of requests this year likely is attributable to a variety of factors, Carlson said. For one, local government aid from the state has not kept up with inflation, meaning it makes up a significantly smaller portion of city and county budgets than it did two decades ago.