Nov 7, 2023 - Politics

St. Paul voters approve sales tax hike for roads and parks

St. Paul skyline

Photo: Raymond Boyd/Getty Images

St. Paul voters have approved a 1% sales tax hike to upgrade roads and parks.

Driving the news: The measure, known as Question 1, won support from 60% of voters in Tuesday's municipal election, per preliminary results.

Why it matters: The increase, which breaks down to an extra one cent for every dollar spent, will generate an estimated $1 billion over the next 20 years.

  • Yes, but: The city will have the highest sales tax rate in the state as a result, at 9.88%

What they're saying: Supporters, including Mayor Melvin Carter, argued that the increase will allow the city to pay for overdue upgrades without making steep budget cuts or raising property taxes.

The other side: Critics raised concern about the impact on businesses and pointed out the majority of the city's infrastructure won't benefit from the big boost.

Zoom in: The bulk of the money generated by the tax will be used fix 44 miles of the city's major roadways.

  • The remaining $246 million will be used to chip away at a $100 million maintenance backlog for city parks.

Flashback: St. Paul was able to put the measure on the ballot after intense lobbying at the Legislature, which must approve all local sales tax questions before they go in front of voters.

Between the lines: Local governments β€” and voters β€” gravitate toward local sales taxes because, in theory, it allows people from beyond the city limits to chip in for projects of regional significance.

Of note: Food, clothing and medicine are exempt from sales taxes.

What's next: The tax hike takes effect April 2024.

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