St. Paul City Council puts sales tax for roads, property tax for childcare on 2023, 2024 ballots

19 July 2023

When St. Paul residents head to the polls this November to vote for city council, they’ll also find a question on the ballot asking whether to raise the city portion of the local sales tax by a percentage point, or a penny on every dollar. The added sales tax, according to the mayor’s office, could generate nearly $1 billion over 20 years, most of it for arterial road reconstruction, with a fourth of the funding dedicated to major parks improvements.

At the request of the mayor’s office, the St. Paul City Council on Wednesday voted 6-1 to authorize placing the sales tax question on the Nov. 7 ballot, with Council Member Jane Prince opposed.

“We have a unique opportunity to make an exceptional investment in our city’s roads and parks, providing future generations with sound infrastructure,” said St. Paul Mayor Melvin Carter, in a written statement following the vote. “We look forward to bringing this conversation to our residents.”

Prince urged the council to amend the ballot language to clarify that the total city, county and sales tax in St. Paul would add up to 9.875 percent, but the council voted 6-1 to reject her amendment.

25 roads for reconstuction identified

St. Paul Public Works Director Sean Kershaw said the city has already identified 25 priority roads for full reconstruction. Bridges would also be eligible for repair under the ballot language.

“There will be a direct line between the sales tax money that comes in and these projects,” Kershaw said. “The sales tax can’t and won’t be used for ongoing maintenance, street sweeping, patching and things like that.”

Council President Amy Brendmoen said new sales tax funding for arterial road reconstruction “relieves the pressure from our general fund, so we don’t have to split our dollars between new projects and … the maintenance that we need to do.”

In a separate action, the council also considered a question regarding potentially using city property taxes to fund subsidies for early childcare and early childhood learning programs over a 10-year period, voting 5-2 to place the issue on the November 2024 ballot. Council Members Russel Balenger and Mitra Jalali were opposed.

Taken together, the funding requests over road reconstruction, parks improvements, childcare subsidies and downtown-area quality-of-life concerns underscore the challenges faced by a high-poverty capital city with a growing backlog of infrastructure needs. Following a pandemic that laid bare deep wealth disparities, those infrastructure needs have at times been overshadowed by human service concerns.

Some of those costs — like road reconstruction — appear inevitable, but they raise questions over which level of government or industry should take the lead in paying them and how funding should be structured.

Costs are inevitable?

Carter has repeatedly noted that expenses related to reconstructing arterial road streets will be born by taxpayers either way, but a sales tax shares the financial burden with city visitors, including tourists and others who work or do business within the city’s borders.

Prince, among other critics, has questioned a line in the proposed sales tax ballot language that seems to offer voters an either/or choice — either support the new sales tax increase, or property taxes will go up an equivalent amount. Prince called the language disingenuous given that funding for road repair can come from a variety of sources, including federal grants and state aid.

“The ‘NO’ language states that most of the billion dollars will be shifted to the property tax — as if legislative budgeting decisions have no role for the next 20 years,” said Prince, in an email Tuesday to the mayor’s office.

The St. Paul Area Chamber of Commerce repeatedly has opposed the ballot question, which if approved would take effect on April 1, 2024.

“The equivalent property tax increase to fund street improvements alone would increase commercial property taxes by about 25 to 35 percent. … Other sources do not address the problem,” said Jon Grebner, political director for the mayor’s office, in an email responding to Prince on Wednesday.

A 2024 ballot question on early childcare and early childhood learning

In November 2024, St. Paul voters will decide whether to approve a dedicated property tax levy that raises funds over a 10-year period to back subsidies for early childcare programs and early childhood learning programs.

If approved next year, the special levy would be structured to raise $2 million in the first year, $4 million in the second year, $6 million in the third and so forth, reaching $20 million by year 10.

“Minnesota is the fourth-most expensive state in the nation for childcare, and so many of our families are struggling, particularly our families of color,” said St. Paul City Council Member Rebecca Noecker, who has promoted the effort across her time in office. “Babies should not be on waitlists.”

Also speaking in support, Council Member Nelsie Yang said that as a new mother, “trying to find childcare is one of the hardest tasks. … It is for our littlest ones, to create an eco-system in St. Paul where families can thrive.”

Prince said the effort could draw additional state and philanthropic dollars, allowing the program to expand.

“Early childhood education is the single best economic development investment the city can make,” she said, calling the ballot language “very thorough and very transparent.”

Also speaking in favor, Brendmoen said the resolution gives the council roughly one and a half years to fine-tune how subsidies might be structured to connect low-income families to childcare and early learning resources.

Critics have questioned whether property tax increases would hurt the very group they intend to support — moderate-income residents — by raising housing costs and further putting homeownership out of reach for first-time homebuyers.

“This is not an action that I can support, or a forum I can support, for raising funds for this,” said Council Member Mitra Jalali, who urged the city instead to partner with Ramsey County and St. Paul Public Schools to prop up existing early learning programs.

Council members said the work of an early learning legislative advisory committee helped guide their decision, following advocacy by a coalition of educators known as SPARK Education.

“We now have an opportunity in St. Paul to build the future that we want and show that early childhood education shouldn’t be a luxury only available to a few families,” said Halla Henderson, chair of the SPARK Education board of directors, in a written statement. “We can lead the way and show the rest of the state that a small public investment in our kids will help every family thrive.”

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