End of session brings benefits to local communities

When this year’s legislative session wrapped in the early hours of May 25, local communities benefitted from some of the work that had been done. 

One bill OK’d a West St. Paul local option sales tax, another created school referendum equalization, while another allowed for sales tax exceptions for the Inver Grove Heights and Mendota Heights fire station projects.

 

Local sales tax

Building on approval granted by West St. Paul voters last November, Sen. Matt Klein said the Legislature approved the the city’s local options sales tax. 

The .05% per dollar sales tax will bring in cash to help offset the city’s costs related to the Robert Street reconstruction, and will be used for future infrastructure projects, as well.

Klein said the tax will sunset after 20 years, or when the city has collected $28 million through it, whichever happens first. The last step is for the West St. Paul City Council to pass an ordinance to put the voter-approved sales tax in place.

Klein said there was hope that local government aid would be given to help cover Robert Street costs, but nothing came of it this year. 

 

Fire stations get a break

Inver Grove Heights is building a new fire station, while Mendota Heights is expanding and renovating its station.

The Legislature passed a sales tax exemption on construction materials for both projects. Klein said this was a standard exemption for communities trying to build such facilities.

Rep. Ruth Richardson said she had three projects that were approved for sales tax exemptions. 

“It is just a great mechanism to help save the local property tax revenue,” she said. “It’s an overall savings.”

It’s estimated to save Inver Grove Heights roughly $300,000 and approximately $190,000 for Mendota Heights.

The other project mentioned by Richardson is the Dakota County SMART Center, which will be located in Inver Grove Heights. The center will provide benefits beyond her House district as it will be used for regional crisis intervention training for law enforcement. The sales tax exemption is estimated to save that project more than $200,000.

 

A big win

Klein said another big win was referendum equalization. Communities are dependent on property taxes to pay for schools these days, Klein said, which means cities with a big commercial base like in West St. Paul tend to do well.

“If you really don’t have a big commercial base, like across the street in South St. Paul, your taxpayers’ property taxes just don’t go nearly as far funding the schools,” he said.

Aaron Bushberger, director of finance for the South St. Paul School District, said South St. Paul will receive referendum equalization aid, while West St. Paul will not. However, West St. Paul’s higher property tax base means it is less expensive for property owners in that city to pay for a referendum, because the taxes are spread out on more property value.

South St. Paul Schools Superintendent Dave Webb has been pushing for referendum equalization for many years, Klein said. 

“The district has always been advocating, but it started educating the community about it and pushing harder at the Legislature about four years ago,” Webb said.

The state will now subsidize communities that have lower property tax values, meaning a realization of roughly $156,000 each year for South St. Paul schools.

“It doesn’t seem like a lot of money in the state budget, but it’s going to make a big impact for South St. Paul schools,” Klein said.

The passing of referendum equalization does not mean additional funding for the South St. Paul School District, but it does allow for a shift from property taxes to state aid. 

“The recent change in equalization approved by the Legislature improves the equalization formula, but has not completely fixed the problem. There is still a large difference in what homeowners have to pay based on the community that they live in. SSP believes that funding for schools should not be dependent upon your ZIP code,” Webb said. 

 

–Hannah Burlingame can be reached at 651-748-7824 or hburlingame@lillienews.com.

Rate this article: 
No votes yet
Comment Here