Citizens from the far western Mesabi Range town of Grand Rapids, Minnesota, will vote on whether the city will seek a $0.01 Grand Rapids city sales tax when they cast their general election ballots this fall. The Grand Rapids City Council unanimously approved the ballot measure at a recent meeting.
The only northern Minnesota city with a sales tax is Duluth, which is the regional business hub and a major port. The list of Minnesota cities with a sales tax includes few towns the size of Grand Rapids. Grand Rapids would become the smallest city with a local sales tax if this measure succeeds.
The city argues that this measure would allow Grand Rapids to raise money for street improvements without hitting residents with huge property tax assessments. Because 55 percent of the revenue from a Grand Rapids city sales tax would come from people outside the city, according to a University of Minnesota study, this would save residents more in the long run. That was the primary sentiment by councilors in this Lisa Rosemore story in the Grand Rapids Herald-Review.
But that’s a tough two-part argument to sell to the people as they read a ballot measure that sounds like a tax increase.
If it succeeds, the model would surely be considered by other small cities, sparking an old debate about what kind of taxation is the most fair.
“If voters approve the referendum for a five-year city sales tax”…Five years, are you kidding me? How many taxes once enacted have ever gone away, have ever not been increased? These city council members who unanimously voted for this are comedians..It’ll certainly drive non-Rapids residents to shop elsewhere..
It will certainly generate some income from non-residents but as observed above it will render Grand Rapids a little less competitive economically. It is a two edged sword.