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St. Paul voters to weigh in on sales tax increase to fix roads

St. Paul voters will decide the fate of a 1% sales tax increase
St. Paul voters will decide the fate of a 1% sales tax increase 02:08

ST. PAUL, Minn. — This Tuesday St. Paul voters will weigh in on the fate of a 1% local sales tax increase proposal that will fund infrastructure improvements.

The hike would generate $1 billion in revenue over 20 years for roads, bridges and parks and recreation. Supporters believe it's a necessary solution for infrastructure in disrepair and to mitigate further burdens on property taxpayers, who may bear the brunt of even more increases.

At a press conference Friday advocates urging "yes" votes on the sales tax question this election argued that both residents and visitors should contribute to maintenance of the city's infrastructure in this way because people travel from all over the state to enjoy the state capital and use its roads, bridges and parks when they do.

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"The alternatives are to only ask our residents to pay for the costs of that through property tax which is millions and millions of dollars and quite simply is not right or fair or sustainable when we know the whole state of Minnesota is coming to visit our capital city," said Mitra Jalali, council member for Ward 4. "You'll see these signs: when everyone pitches in, we all benefit."

If the measure is approved, the total sales tax rate in St. Paul will be 9.875%, the highest in the state. Customers already saw their bills go up when they shop because of an additional collective 1% increase imposed by the state legislature in the seven-county metro to support housing and transportation in the region.

That worries some businesses who fear it will drive consumers out of the city. The St. Paul Area Chamber said it surveyed its members and 77% opposed it.

"Instead of imposing the highest sales tax rate in the state, we must consider the potential negative impacts on businesses, consumers, and the local economy, not to mention the limited scope of its impact to repair our street infrastructure," said B Kyle, president and CEO of the chamber, in a statement to WCCO. "We need to explore alternative solutions, such as supporting new development, leveraging the new revenue headed St. Paul's way and focusing on core city services in the budget process to address our city's needs without overburdening our residents."

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The chamber said it disagrees with using sales taxes to fund city operations and core functions of government, like infrastructure maintenance. It also characterized the proposal as regressive, impacting low-income people more significantly.

Jalali pushed back, citing Minnesota's sales tax exemptions like groceries, pharmaceutical drugs, and clothes. She said the alternative — raising property taxes even more — is worse for those families.

"Our lowest income or residents on a fixed income who are homeowners and paying property taxes, they feel those shocks the hardest," she said. "If have no revenue source capturing the non-St. Paul residents then they will bear the cost of that the most."  

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