The Cloquet City Council unanimously passed a resolution asking the Minnesota Legislature to approve a new 0.5% sales tax during its meeting Tuesday, Nov. 17.
The new sales tax would be used to pay for an array of repairs and improvements to Northwoods Credit Union Arena, Pine Valley Ice Arena as well as the ski chalet and trails at Pine Valley Park.
The action is the first step in a years-long process to enact a new sales tax in the city. If the Legislature approves the tax in its next session, the issue would then go before Cloquet voters in the November 2022 general election.
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While this would be a new sales tax, it would not overlap with the current 0.5% sales tax the city currently collects, according to Tim Peterson, city administrator. The current sales tax was tied to an amount — $16.5 million — when it was enacted nearly 20 years ago. Currently, the city collects about $800,000 per year and at the current rate, it will expire sometime in 2021 or 2022.
“This is not necessarily an increase in the sales tax,” Peterson told the council. “It's not necessarily a continuation either, but if the timing worked out, we would basically just continue the existing 0.5% percent sales tax that we have already in place.”
If approved by the Legislature and voters, the tax would take effect in either the first or second quarter of 2023, Peterson said.
The new sales tax, if enacted, would not be tied to a specific amount, but to specific projects at the park.
After the city took over ownership of NCUA and Pine Valley in January 2019 from the Cloquet Area Hockey Association, an audit revealed that nearly $4 million in repairs were needed. Over the summer, the arenas had more than $1 million in work done to replace the plumbing beneath the ice at Pine Valley and convert the cooling plant to an indirect system. The project also upgraded the dehumidification system at NCUA.
The plan Cloquet is submitting to the state identified more than $6 million in projects at the ice arenas, including more than $4 million to replace the ice plant and floor at NCUA.
More than $2.1 million in repairs were identified at Pine Valley Park, including up to $900,000 to replace the chalet and $200,000 to expand the mountain bike and cross-country ski trails at the park.