What to know about the proposed sales tax increase on St. Paul ballots

St. Paul voters will decide next week whether the city's sales tax should be increased by 1% to raise nearly $1 billion for street and park improvements over the next 20 years. If voters approve, the capital city's 9.875% sales tax would be the highest in the state.

Here's what o know about the proposal before heading to the ballot box.

What would the sales tax pay for?

Minnesota law requires that sales tax proposals define the projects local governments intend to fund. St. Paul's plan would put $738 million toward streets and bridges, and $246 million toward parks.

City leaders identified 24 street segments that would be reconstructed using sales tax revenue. The funding would cover 44 miles of arterial and collector streets owned by the city. You can see a map of the routes here.

The money for parks would be used for maintenance of St. Paul's recreation centers, athletic courts, play areas and trails. The sales tax revenue could also be used to help construct an East Side community center, an athletic complex for regional sporting events, a Mississippi River learning center at Crosby Farm Regional Park, and a 1.5-mile river balcony downtown.

Why not just use property taxes to cover these costs?

City leaders are pitching the sales tax as a way to get visitors who use St. Paul's streets and parks to chip in for their maintenance. To raise an equal amount of money using property taxes, the city would have to increase its levy by 20%, costing the owner of a median-value home an additional $304 annually.

Why are St. Paul's streets in such poor shape?

The city's Public Works Department has been sounding the alarm for years about the streets. According to the city's website, roads are supposed to be reconstructed roughly every 60 years. St. Paul's streets are on a 124-year reconstruction cycle.

In recent years, St. Paul budgeted about $22 million for street improvements. Officials estimate the city would need an additional $29 million annually for its streets to meet satisfactory pavement condition standards.

They offer a variety of explanations for the funding gap: St. Paul did not raise its property tax levy for 12 years before 2006; state aid has not kept up with inflation; and road construction costs have nearly tripled over the last two decades.

What's the case being made against the sales tax proposal?

The ballot measure has a high-profile opponent in the St. Paul Area Chamber of Commerce, which argues the increase will drive shoppers to neighboring cities with lower taxes.

Opponents have said infrastructure maintenance is a core city function that should be prioritized in its budget. Additionally, some have criticized the proposal for including funding for new parks projects, arguing St. Paul should not build more when it cannot maintain its existing infrastructure.

Critics also point out that sales taxes are regressive, meaning they take a larger percentage of income from low-income people. The Legislature has historically limited cities' abilities to impose sales taxes for this reason, and also because lawmakers believe they unfairly favor retail-rich communities.

What arguments are being made for the sales tax?

Supporters say the sales tax will spread out the burden of maintaining streets and parks from residents to those who visit or work in St. Paul. Others say the new funding stream will allow the city to better coordinate with updates to its bike routes and the bus rapid transit system.

While city leaders acknowledge some criticisms of the plan, they argue there is no better alternative. They've noted that Minnesota exempts food and clothing from sales taxes, and that St. Paul's new sales tax would still be close to those of several nearby cities.

Advocates warn that if the tax doesn't pass, roads will become even worse — causing more problems for users and discouraging investments in the city.

How were projects selected for sales tax funding?

Public Works staffers established five goals: improving regional transit corridors, industrial freight connections, pedestrian safety and access, connections to the river; and expanding the off-street bicycle trail network.

Officials designed a system to score and rank streets in need of improvements, taking under consideration factors such as pavement condition, crash history, traffic volume and neighborhood demographics. They aimed to pick projects spread throughout St. Paul.

City leaders say the sales tax would free up other resources to spend more on other streets, including residential ones.

What about the timeline?

If passed by voters, the sales tax increase would take effect April 1. In a recent presentation to the City Council, Public Works staffers said the first sales tax dollars would go toward a $10 million reconstruction next year of a stretch of Grand Avenue that runs between Snelling and Fairview avenues.