Note:This blog post has been updated to correct an error. Olmsted County would not be responsible for entire $119 million in transportation upgrades as originally reported. Rather, the county would only pay a portion of that amount based on a formula. Details about the specific dollar amount were not available Monday night.
The local match for Mayo Clinic Destination Medical Center would swell to at least $128 million under a legislative compromise unveiled Monday night as part of the House tax bill.
The legislation would require the city to contribute at least $128 million toward the 20-year project. In addition, the county would be responsible for a portion of $119 million in transportation upgrades needed for the project. That’s well above the $60 million in local funds initially pledged toward the project. The bill also drops the state’s share of the cost to $338 million instead of the $565 million Mayo Clinic had been seeking.
Rep. Kim Norton, DFL-Rochester, said Mayo and local officials will have to determine whether this proposal is workable. The plan would give the city and county the authority to raise a wide range of taxes to cover the local match. Ideally, the majority of those taxes would be targeted at visitors, but Norton said that won’t cover the whole cost. Inevitably, local taxpayers will have to pony up more for this to work.
"There will be an additional burden, and it could just be an extension of our sales tax, which everyone is used to paying, and I am sure that won’t sit well with some citizens," she said. "And yet, we’ll all benefit from what’s going to happen financially as well as being a livable city."
ADVERTISEMENT
In order to remain more globally competitive, Mayo Clinic has pledged to invest $3.5 billion to expand its Rochester campus and leverage more than $2 billion in private investment. In exchange, the clinic wants the state to pay for the public infrastructure upgrades needed to support that massive growth. Those dollars would go towards things like parking ramps, transit, bridges and site clean-up costs.
Initially, Mayo proposed capturing a portion of the additional state taxes generated by the project and using those to pay for the infrastructure upgrades. But that idea failed to win support among key lawmakers, including House Taxes Committee Chairwoman Ann Lenczewski. Under the new plan, Mayo Clinic would have to spend $200 million on construction before any state money would be available. The state would provide up to $30 million per year in direct aid to the city for infrastructure.
Lenczewski said an analysis showed that Rochester residents pay far less for infrastructure than residents in other large cities. This plan requires the local governments to pay their fair share.
"We think it’s a very reasonable lift," she said.
