Officials: sales tax proposals relieve property tax burden
October 14, 2022
Voters in Cloquet will see two sales tax proposals on their ballots during early voting and the midterm general election Nov. 8.
Carlton County voters will have to pay attention, too, because they're part of half of this.
The ballot questions both ask voters to raise the existing sales tax by 0.5% - half-a-penny per dollar to raise $8 million in project funds for the city of Cloquet, and another half-penny countywide to fund the $66 million Carlton County Justice Center already under construction.
The Pine Knot spoke with officials from both jurisdictions to learn more about the proposals.
"The biggest thing we're trying to get across is that we already recognize property taxes are higher than anybody wants them to be," city administrator Tim Peterson said. "We understand this as an opportunity to grab some of the sales and revenues coming through town from people who don't live in our community to help fund projects for our community."
At stake for the city of Cloquet, projects at the hockey arenas and Pine Valley recreation center. Northwoods Credit Union Arena and the adjacent Barn require a new joint ice-making plant, to replace two aging plants. Coolant used in the existing plants is being outlawed, forcing arenas across the state to find new climate-friendly agents to make ice.
"It is absolutely a need," Peterson said. "There aren't any grants that will pay for that, and just utilizing property taxes doesn't take into account the fact we have a lot of visitors coming into the area for that park."
If the ballot question for a half-percent sales tax increase in Cloquet fails, it'll take longer to modernize the park and ice rinks, Peterson said, and funding will be dependent on budgets and fewer pots of money.
It's a similar argument in the county. Except there, if voters fail to pass the half-percent sales tax ballot question, then the Justice Center will be largely funded through property taxes.
"We have been very aware of that fact and we want people to be as clear and well-educated as can be," county coordinator Dennis Genereau said.
Another point of clarity made at a county fair booth and in countywide mailers to residents: "We've told people you're not voting for or against the project," Genereau said.
That much is already done, approved by the county board this year. Footings are in the process of being poured, Genereau said, and the driveway is in, ushering in 22 months of construction expected to conclude in the summer of 2024.
Should both the city and county ballot questions pass, sales tax within the city of Cloquet would increase by 1%, to 8.375%. The statewide sales tax rate is 6.875%.
Affirmation from voters throughout the rest of the county would mean the sales tax rate would increase to 7.875%, from 7.375%, because the county also has an existing 0.5% sales tax used for county road and transportation improvements.
The city of Cloquet is also already operating with a 0.5% sales tax increase, money that's been used since passing a referendum in 2012 to collect $16.5 million for parks and infrastructure improvements.
"The existing sales tax has not expired," Peterson said. "It's touched just about every single park and a lot of road and utility projects."
Legislative approval of sales tax increases is required, and lawmakers now expect proposals to be centered around regional significance.
For the county's sake, the inclusion of a 16-bed wing and program for justice-involved females within the new 80-bed jail and courthouse qualified it for legislature approval. According to a previous interview with Sheriff Kelly Lake, there has been a "huge increase" in females within the state's justice system.
"The female program can be used statewide and fits that regional definition," Genereau said.
Both the city and county proposals gained State Legislature approval in 2021.
Back in Cloquet, regional appeal comes as Pine Valley is one of only two sites in northern Minnesota, joining Coleraine, to feature jumps for ski jumping. People regularly come from as far as Chicago to jump.
Additionally, the wooded park features Nordic ski trails, 5 miles of single-track biking trails and a chalet used as an event center. Under the current proposal, the steel-framed jumps would be fortified and made safer to last into the future. The parking lot is expected to be paved and the chalet either updated or replaced. Park improvements would make up $2 million of the sales tax revenues sought. The city council, community, and user groups will need to figure out the precise direction for the chalet should the referendum pass. Snow making is not on the list of improvements.
Additionally, exterior lighting at the hockey arenas and Pine Valley would be improved, and Northwoods Arena is ticketed for accessibility updates, including to the bathrooms. All told, $6 million is targeted to hockey arena improvements, starting with the ice plant.
"We want to make sure everybody can utilize the park and that the arenas are safe, welcoming places," Peterson said. "All of that."
The Pine Knot asked about possible use of Covid-19 rescue funds. Those are being aimed at broadband infrastructure improvements, Peterson said, including city projects partnering with Carlton County and Thomson Township already in the works. Even if Covid funds were still available, the city didn't get enough to cover what it plans for Pine Valley and the hockey arenas, Peterson said.
"We're trying to get support from outside by the people who make these places regional," Peterson said. "That helps everybody."
Of course, residents also pay into the sales tax coffers. If the ballot questions pass, the additional sales taxes are collected until the $8 million and, in the county's case, $60 million caps are achieved.
"A good year of sales means we collect more sales tax, which shortens the length of time we have the sales tax," Peterson said, explaining the mechanics. "A bad year would mean we collect less money and extend the number of years (to reach the cap)."