Dayton Tax Plan Local Benefit 29 Jan 13

About two dozen Minnesota cities and counties would see a gusher of unexpected money if Governor Dayton’s proposed sales tax expansion to more items and services prevails, and New Ulm is one of those communities. That’s because the local governments piggyback on the state’s sales tax with levies of their own. New Ulm, for instance, has an extra .5% sales tax enacted in 1999 to pay for the New Ulm Civic Center. Most of the local add-on taxes are dedicated to specific purposes such as that, which could mean quicker repayment of public debt on building projects. For those cities, it means their local sales taxes would blink off sooner. Other cities have more flexibility in spending dollars from local taxes that either never expire or won’t for decades. Early estimates by the Minnesota Department of Revenue show that cities and counties with their own sales tax could expect to see 60% more than they take in now.