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Rochester sales tax extension talks moving forward

Council plans meeting next week to start state legislative process with four projects targeted for tax extension

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ROCHESTER — A proposal to extend the city’s 0.5% sales tax into 2040 received initial support Monday.

At least five of seven Rochester City Council members voiced support for four proposed projects that would extend the existing tax by an estimated 16 years if approved in a citywide election.

“If it’s not on the list, there’s nothing to talk about,” council member Mark Bransford said in supporting the broadest list proposed.

The proposal earmarks $50 million for street reconstruction projects, $50 million to address housing needs, $40 million for future work related to flood control and water quality, and $65 million to create an undefined regional community or recreational complex.

City Administrator Alison Zelms said the proposals are intended to be broad as the city begins the process of seeking approval from the Minnesota Legislature, which is a new first step since the city’s 2013 sales tax extension.

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“It sort of changes when engagement happens,” she said, acknowledging that past sales tax discussions started at the community level.

Deputy City Administrator Aaron Parrish said community discussions will help define street projects, housing programs and other details related to projects that would benefit from the sales tax.

The legislative changes will also allow voters to determine the fate of each project individually, which Zelms said will make outlining spending and community benefit crucial.

She also said the current project list was developed to avoid funding potential Destination Medical Center projects, since the city already has a 0.25% sales tax in place for those expenses.

Council member Nick Campion said the lack of clarity for some of the projects gives him pause.

“It’s a significant sum of money here that we are talking about, and from my perspective, it’s a relatively superficial description of what a number of these are,” he said.

He said projects like street reconstruction are important and sales tax revenue is needed for the city to fund projects, but he didn’t say whether he supports everything on the list.

Shaun Palmer was the only council member to propose waiting for a 2024 vote when the current 0.5% sales tax is expected to expire.

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“I think maybe some stability all the way around might be beneficial to that,” he said.

Council member Kelly Rae Kirkpatrick said she favors moving forward this year, but would like to see the city go further in an effort to remove pressure off local property taxes.

“If sales tax could fund everything we want it to do, it needs to be a lot higher,” she said. “I don’t feel a 0.5% tax, or even a 1% tax, is high enough.”

Zelms said legislative limits on the number of projects that can be supported likely puts a larger tax out of reach, but she said the council will be discussing other options to diversify revenue and take pressure off property taxes in the future.

The city council will hold a special meeting at 3:30 p.m. Monday, Jan. 31, to vote on the sales tax extension and meet the deadline for consideration by the Minnesota Legislature.

If approved, a citywide vote would be held with the general election on Nov. 8.

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 rpetersen@postbulletin.com.
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