It’s rare that a sales tax like the one East Grand Forks is sending to Minnesota lawmakers gets shot down in St. Paul -- but that might change.
The Minnesota Legislature approved all 16 local sales taxes it considered in 2019, but a new state law could mean more scrutiny of similar proposals in the future, such as East Grand Forks’ request to enact a 2% sales tax to pay for a $36 million slate of Parks and Recreation projects. Council members there voted 6-1 on Tuesday to send the measure to legislators.
“I would take last year as kind of like, the horse is out of the barn, and (legislators) felt like they couldn’t stop any of them,” said Pat Dalton, a staff coordinator at the Minnesota House Research Department, a nonpartisan arm of the Minnesota House of Representatives that authored an October 2019 report on local sales taxes. “They did a major change to the law to say, ‘but we’re not necessarily doing this in the future.’”
A 2019 Minnesota law that was approved concurrently with all those sales taxes stipulates that they must be approved by legislators before heading to local voters for final approval. The order was different before that: city or county governments and their residents would approve a sales tax first and then send it to the Legislature for final approval.
The new law requires cities to specifically list projects that the proposed tax would pay for and to demonstrate their “regional significance.”
Lawmakers also can vote on each proposed project separately. If the tax makes it onto Eastsiders’ ballots this fall, they’ll be able to do the same.
An informational packet put together by East Grand Forks city staff characterizes all four projects the city is eyeing as potential regional hubs and argues that they’d attract tourists and athletes to the revamped Greenway trails or renovated East Grand Forks Civic Center.
The 1971 “Minnesota Miracle” reformed how the state’s public schools and local governments were funded. It ramped up state aid to those governments, but prohibited them from enacting sales taxes of their own. Each city that’s enacted a sales tax since then has done so via a special law approved by legislators.
Whether or not it’s easy to get a sales tax through the Legislature is more of a philosophical issue than a Democrat-or-Republican one, Dalton explained. Cities send their sales tax plans to the House and Senate’s tax committees, and some committee chairs have been far more skeptical of their usefulness.
East Grand Forks-area legislators did not return Herald requests for comment on Wednesday.