Sales tax options on ballot clarified

Thanks to a reader, we’ve got a deeper understanding of Cloquet’s sales tax ballot question. Or, questions, rather.

The city of Cloquet is seeking a half-percent increase to its sales tax in order to fund roughly $8 million worth of projects at Pine Valley recreation area and the city’s adjacent indoor hockey rinks, the Barn and Northwoods Credit Union Arena.

But early and absentee voters, like the reader, Dan Unulock of Cloquet, have noticed the ballot doesn’t restrict the sales tax increase to one question. Instead, it’s split into two questions on the ballot.

“The front page story of the (Oct. 14) paper said city voters would see two tax questions on their ballot,” Unulock said. “I took this to mean one from the city and one from the county. (But) there are really two from the city and one from the county, a total of three questions on the city ballot.”

The city’s first ballot question asks for a half-percent sales tax increase to fund $2.1 million worth of improvements to Pine Valley Park; the second asks for a half-percent increase to fund $6 million for ice arena improvements. Additionally, the county is asking for a half-percent sales tax increase to fund its $66 million Justice Center, and that question is also on the ballot.

City administrator Tim Peterson explained this week that both city questions reflect the same 0.5% increase, meaning a vote in favor of one or both ballot questions would increase the city’s sales tax by a half-penny per dollar. A vote in favor of both would not increase the city’s sales tax by 1% as could be intuited, rather it would affect the length of time the sales tax is in place in order to pay for the improvements.

“Technically we really needed two separate questions,” Peterson said. “It made it slightly more complicated.”

He explained that in the years since Cloquet’s 2012 0.5% sales tax increase, which has yielded $16.5 million worth of street and parks improvements, the state legislature made changes to conditions for municipalities seeking to increase sales taxes. In order to gain legislative approval, the additional sales taxes collected need to support projects with a regional function; ballot questions also needed to more specifically identify projects and ask separate questions for separate projects.

The Pine Knot News regrets its failure to not clearly articulate the ballot question being split into two questions. Even the city of Cloquet’s fact sheet about the additional half-percent sales tax proposal fails to illuminate the mechanics of the ballot.

The statewide sales tax rate is 6.875%, but the city of Cloquet’s is 7.875%, reflecting the 0.5% increases already in place in both the city and county. If the city’s ballot question passes, the rate would increase to 8.375%. Additionally, if voters chose to fund the Justice Center using sales tax from the third ballot question facing local voters, then the city’s sales tax could potentially rise to 8.875% when all is said and done.

What follows are the city and county ballot questions pulled directly from the ballot as it appears on the Secretary of State sample ballot:

City Question 1

City of Cloquet Sales Tax Request for Pine Valley Park

Shall the City of Cloquet impose a temporary sales and use tax of one-half percent (0.5%) for a period of ten (10) years, or until $2,124,700 plus an amount equal to interest and the costs of issuance of any bonds is collected, to finance improvements at Pine Valley Park? The City of Cloquet sales and use tax, proposed at this election, will not exceed a total of one-half percent (0.5%).

City Question 2

City of Cloquet Sales Tax Request for Ice Arenas

Shall the City of Cloquet impose a temporary sales and use tax of one-half percent (0.5%) for a period of ten (10) years, or until $6,025,500 plus an amount equal to interest and the costs of issuance of any bonds is collected, to finance the Cloquet Ice Arena Improvement Project? The City of Cloquet sales and use tax, proposed at this election, will not exceed a total of one-half percent (0.5%).

County Question 1

How will the new Justice Center be paid for?

The new Carlton County Justice Center is being built. Shall Carlton County be authorized to pay for construction and financing costs through a county wide one-half percent (0.5%) local option sales and use tax? A yes vote means that the majority of the costs would be financed through the sales and use tax. A no vote means that the majority of the costs would be financed through property tax.