Voters approve local sales taxes in Cloquet, Moose Lake

Talk about it

Cloquet City Administrator Brian Fritsinger was smiling Tuesday night as voting returns from Cloquet showed city residents voting “yes” to the half-cent local option sales tax by a significant margin.

“I’m happy, very happy,” said Fritsinger, doing the math as the returns came in.

Final totals put the “yes” votes at 3,785 (63 percent) to 2,219 (37 percent), a win that Mayor Bruce Ahlgren said was a huge relief.

“After 10 years of trying to get this, I’m just so happy it turned out this way,” he said, crediting the sales tax committee for getting the word out to residents. “I was a little nervous: you don’t know what the general public is going to do sometimes.”

Essentially, passage of the sales tax gives the city another funding source to finance projects that might not happen otherwise.

Currently, the state of

Minnesota levies a 6.875 percent tax on the purchase of certain products. The local option sales tax allows local communities to impose up to an additional 1 percent on these same products. The half-cent tax would apply to anyone shopping in Cloquet and is expected to raise between $500,000 and $625,000 annually. Items such as food, clothing, gasoline, fuel oil and prescriptions will not be taxed. The sales tax on motor vehicles sales is proposed to be limited to $20 per motor vehicle.

Revenues raised by the tax could not be used to finance normal city expenditures, only those outlined in the legislation passed by the Minnesota House and Senate.

Therefore, revenues from the Cloquet sales tax could only be used for the following items included in the legislation:

• Construction and completion of park improvement projects, including – but not limited to – the St. Louis riverfront area; Veterans, Hilltop and Braun parks; Pine Valley (both the park and two hockey arenas) and development of pedestrian trails within the city.

• Extension of utilities and improvements associated with the development of commercial property adjacent to Highway 33 and Interstate 35.

• Engineering and construction of public infrastructure improvements, including storm sewer, sanitary sewer and water, as well as city streets.

“Now comes the hard part, where the council has to decide on what to spend the money on first, second and third, or do we spread it out,” Ahlgren said. “That will take a while. I think we need to take a deep breath and think about it, then move forward.”

Ahlgren said the tax has already been approved by the state legislature, and will start taking effect in January.

The tax sunsets at 30 years or $16.5 million, whichever comes first.

Moose Lake

In Moose Lake, voters approved a proposed half-cent local option sales tax by an even greater margin than in Cloquet. More than 67 percent (502 voters) said “yes” to the tax, while 32.5 percent (242 people) voted against it.

“We’re very happy about that,” said Moose Lake Mayor Ted Shaw.

In Moose Lake, however, things will go in a different order. Because of changes during the last legislative session, the city held its referendum first and now must ask the legislature to approve the local option sales tax.

Shaw said the city will send its request and vote tallies to the state legislature when the new session begins in January.

Proceeds from a half-cent local option sales tax in Moose Lake were estimated at $150,000 to $200,000 annually (based on information from the Carlton County Economic Development Authority) and the sales tax would be authorized for 25 years.

The Moose Lake City Council vote delineated three areas that sales tax proceeds could finance:

• Streets and related infrastructure;

• Parks, including the Historic Trial Depot and Riverside Arena [the hockey rink that was under 5 feet of water this summer but it up and running now]; and

• The Moose Lake Public Library.

“It’s really needed,” Shaw said. “It’s a hard thing to get all the streets and infrastructure done, especially for a small city with a small tax base.”

Moose Lake City Administrator Mark Vahlsing said the local option sales tax is an important funding mechanism for Moose Lake because 75 percent of the property in the city is tax-exempt.

“We have such a high amount of tax-exempt land, including the prison, the hospital, MSOP [Minnesota Sexual Offender Program] plus the schools and churches, that we have a very low property tax base,” Vahlsing said.

A number of other area cities already have a sales tax. Duluth currently charges a 1 percent sales tax on all purchases within the city. The cities of Two Harbors, Proctor and Hermantown also have their own half-percent local option sales tax. Voters in Hermantown appeared to narrowly approve expanding its local option sales tax to 1 percent Tuesday.

Tags: election 2012, moose lake, cloquet, referendums, updates