Grand Rapids is leaving the possibility of a local sales tax up to voters

By KBJR News 1

Credit: MGN Online

Grand Rapids is leaving the possibility of a local sales tax up to voters

May 13, 2014 Updated May 13, 2014 at 2:11 PM CDT

Grand Rapids, MN (NNCNOW.com) --- The Grand Rapids City Council is hoping to reduce property tax burdens on its residents.

They unanimously approved a resolution calling for a local sales tax of one percent to fund projects identified in the Capital Improvement Plan (CIP). If approved by voters, the sales tax revenue would go towards improving roads.

If this sale tax is not approved then the city street projects will either be prioritized or alternative funding will need to be found.
The city says this alternative funding burden will fall on residents and business owners in the form of property taxes.

The city says special assessments for new sewer and water projects would not be affected. They add that a local sales tax would eliminate the need for bonding for street improvements, resulting in $4 million in interest payments over the life of the bonds.

The city has two options: a property tax increase of 5% or a local sales tax. The city says the tax would be in effect until $19.5 million is collected or for five years.

The vote on the Grand Rapids local sales tax referendum will take place on Nov. 4, 2014 as a part of the General Election. Local sales taxes have been approved in many cities like Cloquet and Hermantown.

Ramona Marozas