Sales tax idea deadline nears

The deadline for proposals for a potential local option sales tax is fast approaching, and the city of Red Wing is making plans for what comes next.

Project applications are due by 4:30 p.m. July 16. Applications are available online at the city’s website or with the planning department at City Hall.

Anyone is welcome to submit an idea for how to spend a proposed half-cent tax. The funds would have to go toward capital projects (such as buildings) and they have to be of regional significance.

The City Council has scheduled a joint workshop with the 12-member Local Option Sales Tax Advisory Committee at 6 p.m. July 30 in the council chambers to discuss ideas and the committee’s work.

A special City Council meeting is slated for 5:30 p.m. Aug. 6 at the Red Wing library. That is when council members will review the committee’s recommendations of whether there should be a sales tax, what amount it should be and for what projects the funds should be used.

If the City Council approves language at that meeting, the issue will go before voters during the Nov. 6 general election. The Legislature also would need to approve the tax if the voters move it forward.

“It’s a very democratic tax,” Council Administrator Kay Kuhlmann said.

The city is submitting project applications too. But staff and council members encouraged the public to get their ideas in as well.

The projects can be of any size, Council member Peggy Rehder emphasized.

“I think there’s a misunderstanding that this has to be a really large project,” she said. “Just because your idea’s not huge, doesn’t mean it’s not valuable.”

The advisory committee has established rough criteria for evaluating projects. Generally, the projects must contribute to making Red Wing a regional center, enhance community vitality and take advantage of community connections.

They should be a part of or in alignment with existing plans for the city, such as the riverfront or downtown action plans.

A number of other Minnesota cities have the tax, including Rochester, Mankato and Owatonna.

The projects that would benefit from the tax would be spelled out in the ballot question.

If the tax was at a half cent, that would raise roughly $1 million per year, Kuhlmann said. The timeline then would depend on the projects chosen and how much they cost, she said, but there would be a stipulated end point to the tax.

To extend it after that, another referendum question with a list of new projects would have to go before the voters.

Cities typically bond for the projects and use the local option sales tax proceeds to pay back the funds.

Council members said they have been asked about why the process of exploring the potential tax is “being rushed.”

The reason for the timeline is that a local option sales tax referendum can only go before voters in a general election, council members noted, so the city would have to wait two years if it did not do it this year.

On the Net:

For more information on the potential local option sales tax and project applications, visit www.red-wing.org/salestax.html

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