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City of St. Louis Park to seek community input on a local option sales tax

Post Date:January 22, 2020 12:30 p.m.

At its Jan. 21, 2020, regular meeting, the St. Louis Park City Council decided against asking the state legislature at this time to let St. Louis Park voters decide on implementation of a local option sales tax for infrastructure improvements. The delay will allow more time for input from the community, although any future authorization by the state would still require approval by St. Louis Park voters.

While pursuit of this option would benefit property taxpayers in the community by spreading costs among those who most benefit, the funding need for the regionally significant project with multiple road improvement components is not an emergency. Therefore, the council and city staff wish to take more time for community input and research before possibly revisiting the issue for 2021.

Special state legislation would allow the city to ask its voters to approve imposing a local option sales tax of 0.5 percent. The tax would help meet funding needs for a regionally significant project that includes multiple road improvement components in St. Louis Park. Collective improvements to these roads will benefit residents, non-residents and businesses by ensuring safe and convenient travel by vehicles, bicyclists and pedestrians throughout the city.

The city is proactively trying to determine a solution to spread costs among those who most benefit from the roads, for the following reasons:

  • The needed increase in property taxes to close the funding gap for these projects is unrealistic, requiring St. Louis Park property owners to unfairly shoulder the entire burden of paying for roads that benefit the region.
  • The city recognizes that changes in consumer behavior in response to environmental concerns may affect future gas tax revenues, which help fund these improvements.

The identified project components, estimated to cost a collective $37.5 million, are currently included in the city’s ten-year capital improvement program. According to a University of Minnesota Extension study, a 0.5 percent local option sales tax (5 cents on a $10 purchase) would bring in about $5 million a year, meeting funding needs for the identified road improvement components within 7-1/2 years. Residents would pay about 45 percent; non-residents about 55 percent. The project funded by the local option sales tax would include the following components:

  • Cedar Lake Road (Hwy. 169 to Kentucky Avenue)
  • Louisiana Avenue (I-394 to Walker Street)
  • Shelard Parkway area roads
  • Oxford industrial area, including segments of Meadowbrook Road including the bridge over Minnehaha Creek, Oxford and Cambridge streets, and Edgewood Avenue
  • Texas Avenue/Minnetonka Boulevard intersection

Next steps
Residents should look for more opportunities in the coming months to provide input on the local option sales tax, prior to possible revisiting of this issue for the 2021 legislative session.