St. Paul mayor, Chamber face off in testimony on sales tax for roads, parks

St. Paul Mayor Melvin Carter was among city and county officials from across the state to testify Tuesday before a state Senate committee weighing proposals to increase municipal sales taxes. But Carter’s plea to create a new funding source for road repair met strong objection from the St. Paul Area Chamber of Commerce.

The city of St. Paul already imposes a half-cent sales tax to fund its downtown convention center and neighborhood and cultural projects.

Carter has proposed tripling the local sales tax to 1.5%, which would be the highest in the state — tying it with Duluth. It would raise nearly $1 billion over 20 years, most of it ging to arterial street reconstruction.

Authored by state Sen. Sandy Pappas, DFL-St. Paul, the bill before the Senate Taxes Committee specifies that $738 million, plus associated bonding costs, would be directed toward street improvements. Another $246 million and bonding costs would support capital improvements within the city’s parks and recreation facilities.

State statutes require new local sales taxes to be presented to voters for ballot approval, alongside up to five major efforts to be funded. One of those five major projects is detailed in a map published by St. Paul Public Works featuring 24 road repairs, stretching from Arlington Avenue in the city’s North End to Shepard Road in Highland Park.

Mayor: Streets in dire need of investment

Carter told the Senate committee that the city’s pavement condition index report finds that St. Paul’s arterial and collector streets average a 48, or fair-to-poor, on a scale of 1-100, and that will drop to a rating of 20 within 20 years without a major cash infusion. In other words, the mayor said, the city will be forced to spend $1 billion on those road improvements, with or without a sales tax.

“You will certainly hear from individuals and groups who are uncomfortable with the 1-cent sales tax proposal,” Carter said. “You will not hear any challenge to our assertion that our streets are in dire and urgent need of investment. And frankly, you will not hear an operational alternative.”

Meanwhile, the average building in the city’s parks system — otherwise considered one of the most robust municipal parks systems in the country — is nearly 40 years old, and maintenance backlogs are mounting.

Carter said in addition to maintenance, a portion of the sales tax would support a new multi-purpose community center on the East Side, a mixed-use National Park Service headquarters at Crosby Farm Regional Park and a Mississippi River promenade along the downtown bluff.

Business opposition

Some business leaders have come out against the mayor’s sales tax initiative.

“When we polled our members, 73% opposed the proposal,” said Amanda Duerr, vice president of public affairs for the St. Paul Area Chamber.

Duerr told the committee that St. Paul business owners are already “worn down by government actions that negatively affect the city’s economic viability,” including this year’s 14.65% city property tax increase, and a “rent control ordinance that has slowed local development and growth in the property tax base.”

Another proposal on the horizon would increase St. Paul property taxes to pay for childcare and early learning grants for poor families, an initiative that has met lukewarm reception from the mayor’s office and might not make it to ballot this year.

Other cities, counties seeking sales taxes

Cities and counties across the state are seeking authority to propose local sales taxes to voters at the next general election, with most municipalities asking for a half-cent, 20-year sales tax to back parks improvements that were increasingly in demand during the pandemic.

Woodbury is seeking a half-cent sales tax to fund a new public safety campus. Cottage Grove wants a half-cent tax to fund improvements to Hamlet Park, the River Oaks Golf Course and the Mississippi Dunes Park project. Rice County is seeking a .375% tax to finance a public safety facility.

Edina is looking for a half-cent sales tax to fund major improvements to Fred Richards Park and Braemar Park. Fergus Falls is seeking a half-cent tax to back an aquatics center and Delagoon Park’s campground, restroom and lighting upgrades.

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