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Half-cent sales tax is proposed for counties to offset cuts in state aid
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Counties could add an extra half-cent to the sales tax to help make up for lost state aid and add another revenue stream, under a proposal from Rep. Paul Marquart, DFL-Dilworth.
Marquart, who leads the House Property and Local Sales Tax Division, said the measure would offset more than $100 million in cuts anticipated through state reductions in local government aid.
The half-cent option could be adopted by a majority vote of county commissioners but could be reversed in a countywide referendum that would take place if more than 300 people called for one.
In most cases, city sales taxes would be eliminated in counties that levied the new tax, and counties that passed the increase would be obligated to fund whatever projects were financed through the city tax.
Exceptions would apply in the case of the state's three "first-class" cities: Minneapolis, St. Paul and Duluth.
But counties would have a stable and growing source of revenue, Marquart said. More than half the money collected would be used for property tax relief, he said.
Co-sponsor Rep. Ann Lenczewski, DFL-Bloomington, who leads the House Taxes Committee, said she and Marquart had thought "long and hard" about what type of bill Gov. Tim Pawlenty could endorse. This one, she said, is similar to an earlier bill, signed by Pawlenty, that allowed Hennepin County to raise its sales tax for construction of a Twins baseball stadium.
But Pawlenty spokesman Brian McClung signaled that the governor's support is not likely.
"They keep saying the tax system should be more progressive while they propose more and more sales tax increases," McClung said.
House Minority Leader Marty Seifert, R-Marshall, said the proposal was further evidence of DFLers' appetite for raising taxes.
"We've got to rein in all taxes right now," he said. The message from a higher sales tax, he said, would be "go shop somewhere else." Seifert said that counties without sizable retail centers would be at a disadvantage.
Patricia Lopez • 651-222-1288
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Current state office holders
Governor: Tim Pawlenty
One of only a few prominent Republicans to win a competitive re-election contest in the Democratic sweep of 2006, Tim Pawlenty is widely seen as politically shrewd and naturally likable.
- Lt. Governor: Carol Molnau
- Secretary of State: Mark Ritchie
- Attorney General: Lori Swanson
- State Auditor: Rebecca Otto
Minnesota's political giants: Learn more about the men and women who have shaped Minnesota's political history.
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