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Rochester council will consider future of city sales tax

Any extension, new projects would need legislative approval.

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ROCHESTER — Options for the future of the city’s sales tax will be discussed Monday.

Rochester collects 0.75% of every taxable sale on the city — or 75 cents on a $100 purchase — but projects funded by the majority of the tax are expected to be paid off in 2024.

During Monday’s Rochester City Council 3 p.m. study session, council members will be asked whether they want to seek new authority to maintain or change the city’s 0.5% sales tax that funds citywide projects. The 0.25% city tax for Destination Medical Center projects is not part of the discussion.

The most recent general local option sales tax was enacted in 2013 and funded several projects by generating between $12 million and $13 million a year, according to a report from Deputy City Administrator Aaron Parrish.

With the related funding obligations expected to be fulfilled in the next few years, action this year could add projects to the list and extend the tax, but the council would need to take action during a potential Jan. 31 special meeting.


The urgency is partly due to legislative changes made since the last city sales tax was approved.

The city must seek approval from the Minnesota Legislature before a citywide vote on a proposed tax can be held.

Additionally, cities are limited to funding no more than five projects at a time through a new tax approval.

When Rochester voters approved the latest sales tax update in 2012, it supported more than 20 projects, including new fire and police stations, remodeling of the Rochester Recreation Center with the addition of 125 Live, and several city and county highway projects.

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“This significantly limits our ability to balance many regional investments,” Parrish wrote of the five-project limit. “It also orients the scale of project selection toward larger investments.”

If legislative approval is granted, any tax proposal would be taken to voters during a general election, which would mean November 2022 to November 2024, if the city seeks to avoid a gap in sales tax collections.

To hold a November vote this year, the council would need to approve a resolution this month to ask for legislative approval to move forward.

The city vote would look different from past approvals, since cities are now required to present individual projects for approval, rather than asking voters to OK a package of projects to be funded through the tax.


It means one or more of the proposed projects could fail while others are approved to be funded by the continued tax.

“All of these changes have strategic implications on both the process and project selection,” Parrish wrote. “In addition, projects need to be capital in nature with the regional economic benefit being defined.”

When council members gather for their online meeting Monday, they will be presented an update on how the sales tax has been used, a summary of the legislative process required and options for potential projects that could be funded with a continued sales tax.


Meetings scheduled to be held during the week of Jan. 24 include:


• City Council study session, 3:30 p.m. Wednesday. The online meeting will livestream at and be available on Spectrum cable channel 180 or 188 and Metronet channel 80.
• Public Utility Board, 4 p.m. Tuesday. Access information is available at
• Heritage Preservation Commission, 5 p.m. Tuesday. Access information is available at
• Music Board, 7 p.m. Tuesday. Access information is available at
• Planning and Zoning Commission, 6 p.m. Wednesday. Access information is available at

Olmsted County


• Soil and Water Conservation District Board, 8 a.m. Thursday. Meeting information is available at

Rochester Public Schools

• School Board study session, 5 p.m. Tuesday in the boardroom of the Edison Building, 615 Seventh St. SW.

Randy Petersen joined the Post Bulletin in 2014 and became the local government reporter in 2017. An Elkton native, he's worked for a variety of Midwest papers as reporter, photographer and editor since graduating from Winona State University in 1996. Readers can reach Randy at 507-285-7709 or
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