On Election Day, Minnesota voters generally voted to support tax increases to fund changes to its infrastructure, perhaps threatening Black-owned businesses as they worry that their customers may shop where taxes are lower.
Voters in St. Paul, Bloomington, Edina, Marshall, Rochester and Golden Valley as well as in Beltrami County passed initiatives to raise the sales taxes by up to 3.5 percent to fund new parks, public works, public safety and road infrastructure.
In St. Paul, where the measure could take effect as early as April 1, the existing sales tax will rise by one percent for 20 years to pay for rebuilding 44 miles of city roads as well as improvements to Crosby Farms Regional Park, downtown St. Paul, and a recreation center on the East Side.
The increase would make St. Paul’s sales tax rate the second highest in the state after the state legislature raised sales taxes in October in the seven counties that comprise the metro area to fund transportation and housing. When all is said and done, the sales tax rate in St. Paul will be 9.875 percent. Only Golden Valley, whose voters barely passed a 3.75 percent sales tax hike to fund building its new police, fire and public works headquarters, would have a higher sales tax rate at 12.275 percent.
Back in St. Paul, some Black-owned businesses are worried this could drive customers elsewhere. This has Tetra Constantino, who runs Elsa’s House of Sleep on University, considering cutting the prices on his furniture so those buying will pay the same price even after the increased sales tax goes into effect.
“At the end of the year, after expenses, [we] make about seven to 10 percent over gross sales. If we lower the prices by one to two percent, that immediately impacts [our] bottom line,” said Constantino in his store on University Avenue a day after the election as he took a break from working on emails. “We’ve already lowered prices to remain competitive with suburbs. I look at the big picture.”
However, other Black-owned St. Paul businesses aren’t sure it will make a difference. “I haven’t heard any [of my customers] complain [about the sales tax],” said Carolyn Smaller, who owns Bouquets by Carolyn on Selby Avenue. “Sometimes [customers] don’t even pay attention [to the tax increase].”
But Smaller remains vigilant. She is putting together a display of gifts for people to buy for the holiday season—journals, calendars, bags and puzzles. “[I might] notice a difference in [sales in] December. We’ll just have to see,” said Smaller, who added that she has been busy with orders from all over the United States.
Sales taxes on the ballot elsewhere in the state also passed, but barely. In Bloomington, a 1.5 percent sales tax increase to fund a trail renovation, as well as to build a community health and wellness center and renovate the ice garden, barely passed, with only 56 percent of the vote. The Bloomington sales tax will increase to 8.375 percent.
Sixty-six percent of the voters in Edina approved extending the 0.5 percent sales tax to fund improvements to Braemar Arena for another 19 years.
Meanwhile, voters in Mounds View defeated a measure to raise the sales tax by 1.5 percent over 20 years to expand a community center and to create a regional amateur sports and recreation facility.
Outside of the metro area, Rochester voters barely passed a 0.5 percent sales tax increase to rebuild roads, address flooding, and build a regional amateur sports complex. The sales tax, which the city anticipates raising $205 million over the next 24 years, would also fund affordable housing and workforce programs to help people get jobs. In southwest Minnesota, Marshall voters approved a 0.5 percent sales tax increase to fund new swimming pools.
In Beltrami County, which is in northern Minnesota and encompasses the city of Bemidji, voters overwhelmingly passed a five-eighths of one percent sales tax increase. The measure, which passed with 97 percent of the vote, will raise $80 million over 30 years to replace the current jail. If the measure failed, the county would have increased property taxes instead.
The Beltrami County Jail, built in 1989, reportedly no longer meets state standards. In September 2018, Hardell Sherrell died there as his jailers and medical support staff neglected to answer his pleas for help until it was too late. In January, the Minnesota Department of Corrections ordered the county to reduce its inmate population following a suicide attempt.
Property tax increases, mostly to fund schools, were also on the ballot for those living in Anoka, Becker, Big Stone, Blue Earth, Carver, Chippewa, Clearwater, Cottonwood, Crow Wing, Dakota, Douglas, Fillmore, Freeborn, Grant, Hennepin, Houston, Itasca, Jackson, Kandiyohi, Lac qui Parle, Lincoln, Lyon, McLeod, Martin, Meeker, Mower, Murray, Nobles, Olmsted, Otter Tail, Pennington, Pipestone, Polk, Pope, Ramsey, Renville, Rice, St. Louis, Scott, Sibley, Steele, Stevens, Swift, Todd, Wabasha, Wadena, Waseca, Washington, Winona and Wright counties.