Flood might result in new sales tax for Austin

City considers all options in wake of $12 million loss

By Roxana Orellana

Austin officials are considering a city sales tax as a way to raise money to help recover from last month's record flood.

"We have discussed it from time to time as a source for funding for projects," Mayor Bonnie Rietz said. "And it has already come up now for the flood."


Record flooding two weeks ago caused an estimated $12 million in damage to nearly 80 businesses and 300 homes in Austin. Two people died as a result of flooding when the Cedar River crested at 25 feet on Sept. 15.

In the next few months, Austin will be looking at the feasibility of adopting a 0.5 percent sales tax, which would help generate about $1.1 million annually. It's expected that about 87 percent of the sales tax would come from Austin residents.

Whatever solution the city comes up with, Rietz said, it will involve federal, state and local money. The sales tax would be a way to raise the local contribution, she added.

Before a city can enact a sales tax, the Legislature must give its blessing and voters must pass a referendum.

City officials expect to put together a sales tax request for the upcoming legislative session.

Austin has considered a sales tax before, but has never gone through the process of applying it.

"We've opened the book and were looking at all aspects now as to what direction we should take for both a solution and funding," Rietz said.

City council members also decided Monday to recognize flood volunteers with a small gift and lunch. The council agreed to take funds set aside for the city's annual banquet and money not used for the Coalition of Greater Minnesota Cities conference this summer to thank city and utilities staff, as well as Red Cross and Salvation Army volunteers who helped during the floods.


Austin staff members will finish the appliance pick-up service for flood victims on Wednesday.

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