City Council: Voters should decide on sales tax
The Red Wing City Council chose to put a new sales tax to the voters, moving forward in a process some members described as the most democratic way to establish a tax.
Council members decided 6-1 Monday night to add the question of a new local option sales tax to the Nov. 6 ballot.
Conservative estimates indicate the proposed half-percent sales tax and $20 excise tax on motor vehicles could raise roughly $1 million a year for the city to use toward capital projects.
"We're kind of at a cusp right now, I feel, in Red Wing, where if we take that opportunity we could push our community into a new realm," Council member Mike Schultz said.
Approving the local option sales tax as proposed would allow the city to collect up to $14.88 million within a maximum of 20 years to help fund specific projects.
Those include riverfront improvements such as trail work, boat docking and a marina building, repairs to the Sheldon Theatre, work to make Highway 61 safer and easier for pedestrians to cross and partnering with the Red Wing Area Seniors and Red Wing Collectors Society Foundation to purchase and develop the Pottery Place Annex.
Council members noted their votes would not set up the tax, but simply put the question before residents to decide.
"If we were just voting to impose this tax that ... would give me second thoughts," Rehder said. "However, we're not doing that."
And if the voters approve the tax, the state Legislature also would have to give its consent before it could be implemented.
Council member Dean Hove, who voted against moving the tax forward, said he is concerned about people who might struggle with a new tax and about businesses that are already "fighting almost a losing battle with the internet."
He also worried the number of projects and duration of the tax could be "almost too much."
The details of each project are not yet set in stone, Finance Director Marshall Hallock said. That means the costs could go down, he said, but cannot exceed the $14.88 million cap.
That appealed to some council members.
"I'm going to work really hard to make sure every one of these projects ... is as lean as possible," Council member Lisa Bayley said.
The projects each also have other funding sources to help complete the work, from state and federal grants to backing from local organizations.
The city would bond for the funds and pay that back with the tax.
As planned right now, these are the projects and about how much each would need from the sales tax revenues:
River Walk, Levee Wall extension, Levee Park dock: $5.81 million
Bay Point Park, Upper Harbor marina development: $4.3 million
Red Wing River Walk and Levee Road: $1.77 million
Downtown Main Street revitalization: $1.29 million
Senior Center and Pottery Museum building: $975,000
Sheldon Theatre repairs and restoration: $723,700
Costs right now are estimates.
"These different projects that they've got laid out here have different advocates, different audiences, different supporters," Rehder said.
They also all work together, she and other council members added. The riverfront projects combine as one big endeavor, and the others help stimulate and revitalize the area, members said.
There were 13 project ideas submitted. The Local Option Sales Tax Advisory Committee sifted through them using a number of evaluation criteria and viewing the ideas through the "primary prism of economic development and employment opportunities," Hallock said.
If mayor Dennis Egan decided to veto the resolution approved this week, council members could try to override that at their next meeting Monday.