Chamber pens letter of support for sales tax increase


The Two Harbors Area Chamber of Commerce approved a letter of support Wednesday, March 7, for a proposal to raise the city's sales tax 0.5 percent, which will be used on roads and infrastructure.

Janelle Jones, president of the Two Harbors Area Chamber of Commerce, said she's been talking to business owners and finding little opposition to the proposed sales tax.

"I think that the overall feeling is it's more important to have the good roads for their business and dealing with that sales tax than it is to keep watching everything crumble, because that's the reality of what's happening," Jones said during a meeting among Chamber members and city officials who met earlier in the day Wednesday to discuss the issue.

The city passed a voter referendum in 1998 for a 0.5 percent local sales tax to fund sewer separation, wastewater treatment and harbor development projects. The proposed additional 0.5 percent sales tax would bring the total local sales tax to 1 percent. If that increase is authorized, the total tax for purchases in Two Harbors would be 8.375 percent.

To implement the raise in sales tax, the city will have to put the raise to a referendum vote and have the state Legislature pass special legislation to raise it. City officials said a letter of support from the Chamber would be helpful in gaining support at the Capitol.
The City and Chamber will head to the State Capitol from Monday, March 12, through Wednesday, March 14, to lobby for Two Harbors projects.

The 0.5 percent sales tax raise is estimated to bring in an additional $275,000 to $325,000 for specific use on replacing the city's aging roads and below-ground infrastructure.

The city has over 64 miles of underground sewer, water and storm sewer that need to be "rehabbed" in the next 25 years at an estimated of $61 million, according to City Administrator Dan Walker. Projects slated for completion in the next five years are estimated at $15 million.

The additional sales tax was introduced as an effort to offset the cost of assessments to property owners along the streets and alleys slated for reconstruction.

"Can we try to bring that down a little bit more to make it more equitable for people?" Mayor Chris Swanson said during the meeting Wednesday.

At their Feb. 26 meeting, the Council also unanimously passed a resolution authorizing the city administrator to draft language for a local option sales tax for consideration in the 2018 Minnesota State Legislative session.