The Free Press, Mankato, MN

Local News

October 1, 2012

Expansion of sales tax discussed

By Dan Linehan The Free Press

MANKATO — The city's half-percent sales tax could be expanded from the civic center and airport to a broader tax for projects of regional benefit, under a proposal discussed publicly for the first time Monday.

The sales tax is a good way to fund such projects, City Manager Pat Hentges said, because it is partly paid by out-of-town shoppers.

Spending tax money on outside groups is not an entirely new proposition; the city has supported VINE's senior center, the Hubbard House, an arts center and a downtown business association.

But this proposal would be on another scale, as it proposes $250,000 in annual spending. It would also support construction on new projects, which hasn't been done in the past, as well as extend the tax until 2032.

The seven-member City Council didn't discuss at length whether it wanted to seek state authority to broaden the use of the tax, as staff recommend.

The work session discussion meandered among the scoring rubric, the sales tax, politics at the Legislature and to the separate topic of what to do with an extra $250,000 currently in the 2013 budget. In other words, it is difficult to tell at this point what the council thinks about the most important long-term issue -- the expansion of the tax.

Councilors Jack Considine and Karen Foreman were the biggest supporters of spending on big-ticket nonprofit projects.

"We have no ability to provide even token support to them," Foreman said.

 Hentges presented the council with a 10-category scoring sheet, with a maximum of 20 points, to rate proposed projects.

Hentges said the scoring rubric would give the city a way to rate different projects, even if it decided not to fund them.

"We have basically no structure in place to participate in those funding projects," he said.

"If I had my druthers it would be VINE," Considine said, partly because he said the senior center project has the potential to create more jobs. He also said it would persuade more people to move to the Mankato area.

Mayor Eric Anderson appeared to support expanding the sales tax to regional projects.

A public vote would likely be required if the Legislature allows the city to significantly broaden the tax.

But other councilors kept the discussion limited to the scoring rubric.

"We asked someone to put together how we would dole out money if we had it," Councilwoman Tamra Rovney said.

Council President Mike Laven said he liked the rubric, but didn't weigh in on the wider issue.

"I think we can put this in there and not give the community the impression that there's $250,00 to use," he said.

The scoring rubric was created to satisfy a more immediate demand -- to score requests for money. But Councilman Charlie Hurd said it raises larger questions.

"We have to decide as a council, do we want to go down this road or not," he said.

Separately from the sales tax issue, Hurd said he "can't stomach" the spending of the extra $250,000 in the 2013 budget. There are already two tax shifts in the budget -- $516,000 for the library and $500,000 to a new utility tax -- and Hurd said that isn't a good time to add $250,000 in new spending.

The sales tax discussion will likely be unresolved until well after the election. Hentges said Republicans generally favor sales taxes while Democrats oppose them.

The council also briefly discussed its plans for the civic center. At present, it appears to be more of the same: Do $3 million in hockey upgrades in 2013, but wait for state support before doing the entire $30 million expansion.

Hentges said starting without help would be like "playing with dynamite" because the project might have to stop when the city runs out of local funding. The sales tax has the capacity for about half of the $30 million project, he said.

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