International Falls Mayor Bob Anderson said he's pleased Falls voters Tuesday approved the first step toward implementing a 1 percent local sales and use tax to taxable goods sold in the city limits.
Vote results show 1,380 yes votes to 818 no votes.
A precinct vote breakdown shows:
- East Ward - 381 yes, 275 no
- Center Ward - 339 yes, 259 no
- West Ward - 660 yes, 284 no
"I am pleased my fellow citizens are willing to sacrifice for the betterment of the city," he said Wednesday. "It's not a win or a victory to raise taxes on anyone."
Voters Tuesday also approved local sales tax questions in Two Harbors, Willmar, Blackduck, and Blue Earth, while voters rejected the idea in Grand Rapids.
Sales and use taxes are already collected in 42 counties and 32 cities in Minnesota.
Voter approval is the second step in the process, noted Anderson. Next comes approval of the proposed tax and its use by the Minnesota Legislature and governor.
"As mayor, I am most comfortable with the process the Legislature had designed whereby the council proposes the sales and use tax, the citizens decide whether they want to have it imposed on themselves and the city, and thirdly, the next step: Go to the Legislature and gain approval in the 2019 legislative session."
The idea behind the tax is to spread the burden of infrastructure costs across the users of the streets, including residents who live outside the city and visitors to the area. Implementation could alleviate the need to increase the amount of property taxes collected from city property owners to pay for the city's infrastructure needs.
Anderson said state Sen. Tom Bakk and Rep. Rob Ecklund have indicated they will author bills to present to the Legislature following voter approval. Lawmakers will consider how the city council has proposed to use the estimated $803,149 expected to be generated annually by the tax and why it's necessary to have that additional money.
The money is needed to assist the city in maintaining and improving its infrastructure.
The money generated by the tax may only be used on: Streets, curb and gutter, sidewalks and trails, street lights, sanitary sewer mains, storm water drainage and ditches, water towers, and local costs for the U.S. Highway 53 reconstruction.
The tax cannot be used for any other purposes, noted Anderson.
Anderson said the city council determined the need for the additional revenue for infrastructure, but didn't want to overburden property taxpayers by increasing the levy to generate a similar amount.
Levying $800,000 in property taxes each year to pay for the same infrastructure improvements would cause a $196 increase in annual property taxes on a $100,000 market valued home in the city, officials have said.
Anderson said some people have wondered whether the city would increase the percent collected by a local sales and use tax. The answer is no, he said. "It cannot be without going through the entire process: the council resolution, city vote and legislative approval. That is really not an option."
Following approval by the 2019 Legislature, and assuming the tax would be imposed July 1, 2019, Anderson said the earliest the city could receive money from the tax is late 2019 or early 2020, depending on how long the Minnesota Department of Revenue needs to organize the collection with local businesses.
Anderson acknowledged the impact to businesses. "It adds costs, no doubt, it's a penny on the dollar, but it's what's needed," he said, adding reductions in city costs made by the council simply haven't been enough to make improvements to the infrastructure.
"It isn't that we didn't try other ways to be able to avoid increasing taxes," Anderson said, noting detailed studies by professional engineers conducted on aging water and sewer lines running below the city's 34 miles of streets.
Meanwhile, he said the city has about another 12-13 years to pay bonds on the Voyageurs National Park Headquarters building, which is leased from the city by the federal government.
Once the building is paid off, some money should become available after that, but not in time to address the immediate infrastructure needs.
New councilors
Voters also Tuesday elected two new councilors.
Leon Ditsch will represent the East Ward on the council.
Ditsch received 364 votes over the 280 cast for his opponent, Billy Bright.
The seat is currently held by Brian Briggs, who did not seek re-election.
Ditsch said Wednesday he was happy with the results and thanks his supporters. He also noted Bright called to congratulate him on the win, which Ditsch said he appreciated.
Asked what he sees as his first priority, he said, "Business blight and city blight, not private, but our city, our sidewalks, the things the city should be maintaining."
Walt Buller will represent the city's West Ward.
He received 522 votes, while his opponent, Roger Jackson, received 370 votes.
Buller spent about 16 hours Tuesday as an election judge for a county polling place. He said he's served as a city election judge in the past, but because of his candidacy served as a county judge this year.
He, too, points to blight as a priority.
"The biggest thing on the table is the blight situation," he said. "It's a very complicated situation, but that's one of the things to be addressed - that will be the first one."
Buller thanked his supporters, and all voters for the good turnout, adding that he looks forward to working with the city council and citizens of the city.
"I look forward to serving and doing the best I can," he said. "It's going to be interesting and fun."
He also thanked his wife Cindy and two grandchildren, who he said Tuesday night retrieved 42 of the 50 yard signs Buller used during the campaign.
"I didn't have to do it today," he said, laughing.
