Sales taxes are going up in a handful of cities across Minnesota, after getting support from voters.

There are new sales taxes in Bloomington, Golden Valley, St. Paul and Beltrami County.

Existing taxes were extended in Edina, Marshal and Rochester.

Sales tax hikes can generate big bucks for big projects, but they’re not universally loved.  

Mounds View voters, for example, rejected a sales tax hike.

“I feel like we pay property taxes for roads,” declares Holly Farrell, of St. Paul. “I’m not sure where that money has gone.”

In St. Paul, the 1% sales tax increase adds up to the highest in the state, about 9.8%.

It’s expected to collect $1 billion in revenues.

Most of that money, about $738 million, is to repair roads and bridges.

The rest, about $246 million, is to go toward parks and recreation facility improvements.

“I think it’s important to have good infrastructure,” says Corey Bowman, of St. Paul. “If a sales tax is what we need to do that, it’s fine.”  

In Bloomington, a new 0.25% sales tax will collect $155 million for a health and wellness center, and renovations for an ice garden and the Nine Mile Creek corridor.

In Golden Valley, a new 1.25% percent sales tax will raise $105 million for a new police and fire headquarters, new public works buildings and the land to put them on.

“(There’s) different ways for trying to address the issues that residents have brought up,” explains Nathan Jesson, the Intergovernmental Relations Representative for the League of Minnesota Cities. “Viewed this as ‘the least bad option’ I think, is the term the mayor has used.”

Jesson says sales taxes allow municipalities to spread the pain, including to visitors — and he says it’s not in one lump sum.

“Cities look at other cities and impose sales taxes and view it as a good option for their budgets as well, given the fact they’re relatively popular with voters,” he notes.

Jesson says state lawmakers have imposed a moratorium in 2024 and 2025 for consideration of any new local sales tax proposals.

That pause comes after 31 cities and five counties asked for permission to put a sales tax on the ballot.

Some though, were approved early enough to still get on a ballot next year.

“They’re trying to hit pause,” Jesson explains. “They’ve also created a task force to recommend possible changes to the authorization process to local sales taxes moving forward.”

But he says there’s a downside to putting a hold on sales tax requests.

Jesson believes some previously authorized projects could face delays or budget shortfalls because of inflation.

“That’s definitely going to be an issue for some cities,” he says. “They’re probably going to have to probably backfill with property taxes I would assume, or change the nature of the project.”