St. Paul’s Sales Tax Proposal Is a Regional Slam Dunk for City Streets

By now, you’ve likely heard about the City of St. Paul’s proposed increase to its local sales tax levy to pay for significant investments in its streets and parks. The city is hoping to raise nearly a billion dollars for parks and streets, with roughly $738 million invested in street reconstruction along key corridors. The proposal requires legislative approval before it can be put on the ballot this November. If St. Paul voters approve the measure, it would then be implemented by the city over the next several decades.

Although this issue has encouraged plenty of complex debate and discussion, I believe it really comes down to three compound questions:

  1. Is it OK to use sales tax for this purpose, and how do we rate sales tax as a revenue source?
  2. Why should lawmakers like it, and does it actually pass the regional significance test?
  3. Why should St. Paul voters like it, and what new assets will it actually give our community?

Note: This sales tax referendum would also unlock millions for improvements to St. Paul’s nationally award-winning (and aging) parks and trail system. This is incredibly significant and supported by nearly all parks advocacy organizations in the community. But for the sake of simplicity and focus, this article will specifically analyze the $750 million in transportation funding.

Is it OK to use sales tax for this?

In the world of taxes, sales tax is not seen as the most progressive and fair way to raise revenue, with critics arguing that it charges the new sales tax rate on low- and moderate-income folks the same way it charges wealthier folks. But there are a few things to note in the particular use of this proposed tax (even if we take “sales tax is regressive” at face value, which not everyone does). 

  • First, for those who might not know, the state of Minnesota already exempts food and clothing from its sales tax in recognition that basic necessities should be treated differently than luxury goods or even “nice to have” items.
  • Second, local city leaders simply don’t have the same set of revenue tools at their disposal as state or federal lawmakers, where more progressive revenue options like income tax (which can more directly ask those with the most means to pay their fair share) are available. 

Cities’ tools include their property tax levy, bonding and borrowing authority (which is essentially then paid back by property taxes over time), and whatever local sales tax has been approved in the past. And, as has been discussed at length in Minnesota and elsewhere, property taxes are imperfect in their own right due to the inability to recover the cost of serving large, borderline-corporate nonprofit institutions. Even the ability for St. Paul to recover a fraction of those direct service costs through street assessments was recently removed.

By its very nature, sales tax is a fairly regional revenue source. Commuters, visitors and tourists who utilize St. Paul’s public infrastructure will never directly contribute to the city’s property tax base. But they can contribute to public infrastructure costs via a modest sales tax on the fuel, entertainment and lodging they take advantage of while they’re here for work, events or vacations. 

In a perfect world, the most progressive revenue tools — such as income tax on higher earners or a wealth tax on multibillionaires — would be in place at the state and federal level of government, creating strong funding streams to local governments like the City of Saint Paul that can then support all needed projects and programs. In the meantime, the city must sometimes rely on imperfect tools in order to provide resources and infrastructure. 

To sum it up:

  • Sales tax is an imperfect revenue tool compared with other, more progressive options.
  • It is a regional revenue source being proposed for a regional use (more later).
  • It’s needed due to imperfect — and inadequate — state and federal funding streams.

Why should lawmakers like this? Is it regionally significant?

First, the City of Saint Paul has done a fantastic job of adding new off-street bike and pedestrian routes the past few years: Como, Ayd Mill, Wheelock, Johnson, Robert Piram, the Capitol City Bikeway: These are truly fantastic improvements and the spine of the city’s Grand Round. But, right now, these improvements can happen only piece by piece. No dedicated funding stream is available to help make “road diet plus new safe off-street path” the norm for dozens of our main corridors. 

The reason we need significant, dedicated funding for these kinds of improvements is fairly simple: It is unfair to ask regular people to change the way they move throughout the world — to rely less on exhaust-spewing vehicles and more on bikes and transit — when the options suck.

Early multimodal adopters like me are more than willing to bike downtown, take an entire lane of traffic, get yelled at by a guy in a truck and risk dying. We might even be willing to risk it frequently. But if we are going to help St. Paul, and every community in the region, meet its climate and transportation goals we need to quickly move beyond what can theoretically work for the bravest/dumbest 5% of our residents. And, to be honest, even us dumb 5-percenters would love not to die under a truck. 

If you’ve never biked to work or been a regular pedestrian or transit user and instead driven a car or SUV to get where you need to go, I actually think that’s understandable. Even using painted bike lanes that give you a dedicated place to be on the road can be pretty darn scary, and the prospects of getting hit while a pedestrian are rising. Once you’ve experienced that fear, it’s hard to get motivated to openly choose to experience it again. But if you are one of those people who has experienced that fear and dropped biking or pedestrian-ing your way around, you need to try one more option: use an off-street path!

For someone like me, who spent years biking and walking around St. Paul like a dangerous idiot in the street, riding the new Wheelock Parkway, Como Avenue and Ayd Mill Road trails was life-changing. You know those moments when you’re not afraid of dying and can instead just enjoy the sun, the company of the people you’re with, or the possibility of fun or joy at the end of your pedestrian/biking trip? That is what riding an off-street trail is like! And for pedestrians and bikers, that experience used to exist only in dreams. That’s why most normal people, or at least ones more cautious than me, wouldn’t dare attempt to bike somewhere — except on an off-street trail where you won’t die.

To put a finer point on it: These kinds of off-street trails are significant because they serve as a proven, affordable way to take every emissions reduction, vehicle miles traveled (VMT) reduction and transportation safety goal in the dozens of city, county, Met Council and statewide plans that have already been passed and put us on track to meet them. If you want to create healthier, safer, more connected communities, giving folks in this region safer, less polluting ways to get to schools, jobs, restaurants, friends’ houses, concerts, museums, grocery stores and events in their lives is a hell of a start. So even if the nearly $750 million in streets funding will provide for many layers of benefits — improved streets, improved utilities, more resilience against future climate disaster, better ability for future bus rapid transit to be efficiently routed — I think the new off-street trails along these streets is easily the biggest benefit. 

A quick aside: The Legislature recently made new sales tax referenda harder to implement by moving legislative approval before local approval and by adding a basic “regional significance” test. Without diving too deep into the dynamics of sales-tax-rich vs. sales-tax-poor parts of the state, just know that sales tax referenda are meant to serve truly regional needs (as opposed to something for a specific local use that cities/counties don’t want to pay for with their property tax levy, like an individual local police station or a new city hall).

At the broadest level, transportation investments are inherently a regional use — particularly for a city like St. Paul that serves as the central destination for its surrounding communities. People from Roseville, West St. Paul, Minneapolis, North St. Paul, Bloomington and South St. Paul (we might have too many St. Pauls . . .) need to be able to get to and move throughout the city of St. Paul no matter what mode they are using. And, every metro-area comprehensive and climate action plan also wants them to do it without using their cars so much. 

So, does this proposal pass the regional significance test? Should lawmakers like it? Yes, and here’s why:

  • It creates a sustainable funding stream for improvements we know work.
  • And, it creates connection points between communities (more on that later).

What will this new sales tax revenue get us: Why should St Paul like it?

We’ve gotten pretty far into the weeds about a lot of dynamics at play around the proposal, but we haven’t even touched on the real selling point: What this proposal actually will create! While the City of Saint Paul has largely sold the possible sales tax referendum as a way to “fix our damn potholes” (a thing we’d all be happy with), the true benefit is the heaping pile of new off-street routes you’d get throughout St. Paul — including the much discussed Summit Avenue Regional Trail

First, let’s take a look at the streets Public Works has marked for reconstruction below.

I already covered that off-street trails are significant in helping folks not die, actually encouraging folks to use the route and connecting more destinations together. So, in this section, let’s just bask in the sheer amount of them. And, more specifically, let’s bask in how the new routes will multiply the benefits of our existing off-street routes.

Below is a very unscientific graphic with both the new routes (pink) and the existing off-street paths (green). This doesn’t even include many of the usable to medium-quality options with painted lanes or buffered lanes, or some level of traffic calming that makes a regular old road an OK option at times.

These new funds would do so much to make biking and pedestrian routes realistic for folks in St. Paul and from surrounding communities — whether they’re headed to a destination or just outdoors to improve their mental health. Look at how many of the routes head out of St. Paul. Look at how many new routes connect to existing routes. On the basis of improving our transportation system (or fixing potholes) alone, this is an unbelievable win. But that is so so far from the true value of this proposal. 

  • Are you someone who likes roads to be safer and fewer people to die? Awesome. I’m also in favor of fewer people dying. And, as it turns out, off-street trails make transportation safer for all users (not just bikers).

This proposal is an absolute slam dunk because it is taking a solution (off-street trails) we know has worked in literally every major city in the entire world and admitting that more of that solution is a good thing in St. Paul. That’s to say nothing about how it will help clear our street repair backlog overall, improve road design for future Bus Rapid Transit routes, create more connection points to the Mississippi River, and — yes — fix some damn potholes.

Photo at top by author

About Matt Privratsky

Matt Privratsky lives in Midway with his wife Rochelle and their two dogs Monaco and Pounce. He walks, bikes, and takes transit for as many trips as he possibly can. You can also find him covering all things Minnesota women's soccer at Equal Time Soccer.