Sep 7, 2023 - News

Here's what St. Paul's proposed sales tax hike would pay for

Proposed road projects St. Paul's sales tax hike would fund
Data: Saint Paul Public Works. Map: Will Chase/Axios

If St. Paul voters approve a one-cent sales tax hike this November, the bulk of the $1 billion raised over the next two decades would be used to fix 44 miles of the city's major roadways.

The big picture: The ballot measure, which would increase the total sales tax rate in the city to 9.88%, would double local funding for street maintenance.

  • St. Paul leaders backing the measure, including Mayor Melvin Carter, say the hike will help the city pay for overdue upgrades to roads and parks without steep cuts or property tax increases.

Yes, but: Critics have pointed out that the majority of the city's infrastructure won't benefit from the big boost, which would give St. Paul the highest sales tax rate in the state.

  • They've argued that elected officials should find ways to fund such fixes through the city budget and other state or federal sources instead of a sales tax.

Zoom in: St. Paul Public Works currently plans to use $738 million of the revenue to rebuild 24 highly trafficked city-owned roads that are in "fair to poor" condition, including stretches of Grand, Summit, Marshall, and University avenues.

  • The remaining $246 million would be used to chip away at a $100 million maintenance backlog for city parks. Potential fixes there range from roof and HVAC system replacements at rec centers to new bathrooms and playground equipment, parks director Andy Rodriguez told Axios.

The intrigue: Some of the money could also go to new facilities and features, such as a new multi-sport athletic complex or a proposed 1.5-mile promenade along the Mississippi.

  • Those big-ticket projects would also require additional investment from public or private funding sources, Rodriguez noted.

Between the lines: Local sales tax questions, which require approval from the Legislature to go on the ballot, are supposed to fund projects of regional significance, since commuters, tourists, and other visitors foot the bill for sales taxes.

  • That led city officials to prioritize roads that "have heavier traffic volumes and are more likely to be used by people coming in from out of town," Public Works director Sean Kershaw said.
  • Other considerations included pedestrian safety, whether the road is used for freight and industrial vehicles, and bike access, he added. They also sought to select projects across all seven city council wards.

What they're saying: While not all blocks will benefit, Kershaw argued that putting the sales tax revenue toward fixing those "really awful" corridors will end up "freeing up resources to spend on other streets."

Reality check: Even if the measure passes, drivers shouldn't expect smoother streets overnight. Given the planning needed, Kershaw expects significant road work would begin in 2026 at the earliest. Most will take years to complete.

The bottom line: It's up to voters to decide whether the sales tax should be used for the proposed fixes.

  • Otherwise, city officials say they'll have to look elsewhere, including to property taxes, to fill the budget hole.

Editor's note: This story has been corrected to show the sales tax rate would increase to 9.88% if the ballot measure passes, not 8.88%.


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