West St. Paul begins finalizing new sales tax

With the state’s OK coming out of the legislative session, the West St. Paul City Council got to work June 10 finalizing a new sales tax by unanimously approving the first reading of the ordinance that would create it.

Last November, residents voted to support the local option sales tax, which is .5% increase for retail sales to raise dedicated cash for road improvements. With resident approval, it was next up to the Legislature to sign off on the tax.

“The Legislature did ultimately do that. It wasn’t quite as easy as that may sound,” City Manager Ryan Schroeder told the council.

Final approval of the tax ordinance will be before the council on June 24. Assuming it’s approved, Schroeder said, the city will file paperwork with the Minnesota Department of Revenue and the Secretary of State to finalize the tax.

Should everything happen as planned, the local option sales tax takes effect Jan. 1, 2020.

Schroeder said the tax is expected to generate roughly $1.3 million per year in revenue for up to 20 years, or $28 million, whichever comes first. The city is obligated to use the revenue generated by the tax for roadway improvements.

City attorney Kori Land said the process for a sales and use tax is complicated, which she said she thinks is intentional so “everyone and their brother understands exactly what you’re trying to do.”

Land said the designated project language was taken from the special legislation for what the money can be used for, which is “rebuilding and repair of essential transportation corridors and related ancillary roads.”

Mayor Dave Napier said the tax helps level off the property tax levy for the next several years — this wouldn’t have been the case without the tax.

A public hearing on the tax will be held at the June 24 meeting.

 

Hannah Burlingame

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