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home : opinion : letters to the editor April 30, 2016

1/23/2013 3:41:00 PM
The sales tax plan

Last week, the Windom city council agreed to take preliminary steps toward a %1 sales tax in the community.
If you've been paying attention, this move should come as no surprise. We've reported several times that such a revenue plan was on the council's radar. Last week's Citizen, which was printed shortly before the council made its decision, carried a story saying that there were signs the council would seek a sales tax.
The mere fact that the council approved these preliminary steps does not cinch anything. There are multiple things that would have to happen before the sales tax could take effect. Among them is a citywide vote.
However, there is one thing that is even more important than the vote - educating ourselves.
Because state law requires that a sales tax be voted on in a general election, the community could have 22 months to study this issue. (There is no general election planned in the fall of 2013.) That's plenty of time to learn how the sales tax will impact the community and you, as a taxpayer.
At the moment, the sales tax plan is fairly vague. The council called for a tax that would support public structures and a revolving loan fund for economic development.
Based on last week's city council discussion, it appears the structure would be a new ice arena. There was talk of building a new fire hall, but it seems that the city council is leaning toward a slower-moving fund-raising plan for that project. Councilman Dominic Jones has promoted the idea of having a $2 or $3 fee attached to everyone's utility bill as a sort of user tax for the fire hall addition. At $2 per month, per household, the fee would raise $56,000 per year. Under the plan, the area townships - which would likely cover half of the $1.5-million project - would also raise roughly that amount per year.
Meanwhile, preliminary numbers show that a sales tax would raise roughly $205,000 per year, based on the state's 2010 figures (the city is seeking more current figures). If the state expands its list of taxable items, which is already being discussed in St. Paul, that figure stands to grow considerably.
Right now, Windom is seeking legislation that would suspend the rules and essentially provide the state's blessing on the sales tax prior to a citywide vote. Technically, lawmakers aren't supposed to vote on the sales tax until after a community has had its vote. By approving it in advance, it could allow Windom to begin collecting the tax almost immediately after the city's vote (if it passes).
The local option sales tax is completely new to this community and it would be reckless to blindly support such a plan without having all of the details at our disposal. As we pointed out earlier we still don't have up-to-date estimates, nor has the council approved a plan for spending the money - if, indeed, the sales tax vote were to pass.
However, it's intriguing to think that local projects could be funded with the help of motorists passing through town to buy gas and other supplies. At the same time, we need to consider any potential down sides.
The sales tax is certainly worth consideration, but we've got plenty of time. Let's use that time to our advantage by considering all of the angles.
- Rahn Larson

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