West St. Paul has a sales tax referendum on the ballot on Nov. 6, 2018. Here’s the question that will appear on the ballot:
Shall the City of West St. Paul, Minnesota, be authorized to impose a sales and use tax of one-half of one percent (0.5%) to finance street projects identified in the City’s Pavement Management Plan?
The West St. Paul city website has basic details and an FAQ on the sales tax.
Real quick, the reason the city is doing this is because we have to pay for Robert Street. The state wouldn’t chip in to pay for their road, so we had to do it. We’ll be making $1.84 million debt payments every year for the next 15 years. The sales tax will give us about $1.3 million each year, which cannot go directly to pay the debt, but it will allow us to pay for other street projects that we might otherwise have to forgo.
This will ensure that our Robert Street debt doesn’t cripple our infrastructure improvements over the next 15 years.
If the voters pass it in November, it will go to the legislature for approval, then come back to the city council for approval to be implemented Jan. 1, 2020. The current city council passed this measure unanimously, and most candidates have said they’ll respect the will of voters.
- It’s only half a cent, which will raise the current sales tax from 7.125% to 7.625%. So if you spend $10, you pay 5 cents more in tax.
- It’s a revenue source that taps non-residents. About 30% of the revenue will come from non-residents.
- It’s a way to avoid more property taxes and maintain our infrastructure.
- Some have argued that this is a regressive tax, meaning it will hit lower income folks harder.
- Others have argued that it will drive business away. Developers will avoid West St. Paul and shoppers will go elsewhere.
- Many have pointed out that there’s no guarantee the state legislature will pass it. (Duluth didn’t get their sales tax yet.)
My Stance: Let’s Do It
If you want nice roads, you have to pay for them.
We need another revenue source in West St. Paul, and I think this is a way to do it.
I find the cons rather weak. This may be a regressive tax, but I don’t see it as a substantial burden. And I find the idea that developers and shoppers will be driven away by a half-cent sales tax laughable. Developers aren’t avoiding cities like St. Paul that have a sales tax, and shoppers would spend more in gas than they’d save. As to whether or not the legislature will pass it, one step at a time. We lose nothing by sending it the legislature.
Critics argue that we need to increase the tax base and boost economic development. OK, sure. We’re already working on that. While I think it’s going well, it’s not guaranteed and it will take time. And if it works out and we don’t need the sales tax—great. We can kill it or reduce property taxes or whatever.
The fact that the city council approved this unanimously is also telling. We’ve got several low tax council members who I expected to be more firmly against this—but they’re not. Council member Bob Pace said in the Open Council Work Session that the tax won’t cause people to shop elsewhere. The city also hasn’t received any feedback from businesses, so there’s not some uprising against the idea.
I don’t love higher taxes. It’s not going to fix all our problems. But I also don’t think economic development alone is the magic bullet either.
I say vote yes on the sales tax.
Do your own research on the races in West St. Paul, and be sure to vote on Nov. 6 (or vote early). The West St. Paul city website has details on where and how to vote.