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St. Paul to add sales tax proposal to November ballot

If passed, sales tax would increase 1% over the next 20 years to help improve roads and parks.

ST PAUL, Minn. — St. Paul residents will have a chance to vote on a proposal that would increase the city's sales tax by 1% for the next 20 years to help improve roads and parks.

The city council voted 6-1 Wednesday to add the sales tax proposal to the ballot in November's general election.

Mayor Melvin Carter has been touting the proposal for months, calling it a requirement after "a generation of disinvestment and underinvestment." If passed, $738 million of the nearly $1 billion raised across 20 years would go straight to rebuilding roads. 

Another $246 million would go to improving parks and recreation facilities, according to city officials.

“We have a unique opportunity to make an exceptional investment in our city's roads and parks, providing future generations with sound infrastructure,” Mayor Carter said Wednesday in a press release. “We look forward to bringing this conversation to our residents.”

The Saint Paul Area Chamber of Commerce wrote to the council expressing concern about the cumulative sales tax burden in the city if the referendum passes.  The Minnesota Legislature added one percent to the sales tax in the seven-county metro area, including a 0.75 percent increase for transit and a 0.25 percent hike for a new affordable housing voucher program.

When those go into effect later this year St. Paul's sales tax rate will go from 7.875 percent to 8.875 percent.

"If voters authorize this additional one percent we will then have a local sales tax of 9.875 percent, which will be the highest in the state, and this is coming after a 15 percent property tax levy increase in 2022," Amanda Duerr of the St Paul Chamber told KARE.

"Being the highest in the state... I'm concerned that that makes us an economic outlier," Duerr said. "We’re bordered by a number of other communities where it would be just as easy to go into one of those communities to do your shopping."

St. Paul Public Works Director Sean Kershaw said the city is decades behind in rebuilding major arterial roads, let alone hundreds of miles of side streets.

"We should be reconstructing these arterials every 65 years. We’re on currently a 124-year schedule, so that’s the road is at twice its useful life," Kershaw said. "Summit Avenue is an example of a street that hasn't been reconstructed in over 100 years."

The city will hold events leading up to Nov. 7 for residents to learn more about the proposal, however, dates have not yet been announced. To learn more, click here.

Childcare Referendum

During the same meeting, the Council voted 5-2 to place a proposed property tax hike on the 2024 General Election ballot, to raise money for to help families afford child care and early education programs.

The initiative began with a grassroots campaign by a group called SPARK, which stands for Saint Paul All Ready for Kindergarten. One of the leaders of SPARK was Maria Snider, who operates the Rainbow Child Development Center, which was founded by her mother in 1998.

"Since 1998 we’ve come a long way with state and federal government, but the reality is nobody else is coming to save the day for kids in Saint Paul," Snider said. "A local initiative is right-sized to fit the needs and fill the gaps for what this city needs."

As a provider, she is used to working with parents struggling to afford childcare. In some cases, parents enroll their child but then suddenly become ineligible for childcare assistance programs because of bonuses at work.

"We don’t want families to have to do that. We want families to be able to have stability where their children can stay in care, where they can stay in the job they’re at and be excited they got a bonus, not in fear that now they’re losing their childcare."

Council Member Mitra Jalali voted against putting the proposal on the ballot because she believes the city already has the power to make a difference on childcare affordability.

"I believe that what we should be doing is using our annual budget authority, which currently exists and does not require a forum like an election," Jalali told her colleagues.

"We can be doing things like improving the inequities in existing early learning programs the City already has, looking at ways we can partner with Ramsey County or St. Paul Public Schools so existing plans can be better administered."

Mayor Melvin Carter III is also opposed to the idea at this point in time. He issued the following statement after the vote.

"I have significant concerns with the lack of details available for what would be a brand-new program with a budget that rivals our citywide library system," Mayor Carter wrote. "While I appreciate the ambition behind this well-intended initiative, the City’s focus should remain on meeting critical needs like repairing roads and caring for individuals experiencing homelessness, which have gone under-resourced for far too long."

As proposed the early learning tax levy would start at $2 million in year one and grow by $2 million by each year until reaching $20 million by the tenth year.  Supporters estimate the average household's property tax bill for the new childcare program will increase by $16 in each year.  So, it would begin at $16 in year one and hit $160 by year 10.

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