Option sales tax gets OK

Brainerd residents approved the use of a .5 percent local option sales tax to offset the cost of the city's wastewater treatment facility expansion.

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With seven of eight Brainerd precincts reporting by 1 a.m. Wednesday, 2,301 Brainerd residents had voted in favor of the sales tax and 1,044 had voted against.

Proceeds from the sales tax - estimated to be about $1 million a year until it ends in 12 years - will go toward Brainerd's share of the city's wastewater treatment facility expansion. The total project cost is anticipated to be $25 million to $30 million, of which Baxter will pay about one-third. Both cities received approval to issue the tax from the Legislature.

"Without a doubt it was absolutely needed," said Brainerd Mayor James Wallin. "I would not have put the burden of paying for the wastewater expansion on the citizens, the taxpayers, the business people or anyone else. I thank those who voted for it."

Brainerd's wastewater treatment facility is nearing capacity and the Minnesota Pollution Control Agency has mandated that it be expanded to accommodate growth in Brainerd and Baxter.

The .5 percent sales tax would equate to 10 cents on every $20 purchase, $1 on a $200 purchase and $10 on a $2,000 purchase. Sales tax on vehicles is limited to $20 on vehicles valued at more than $4,000. Food and clothing would be exempt from the local sales tax. It is anticipated that even with the sales tax, Brainerd residents would pay an additional $170 per year - $50 per year through purchases and $120 per year through an increased utility bill.

Without a local option sales tax, Brainerd's share of the wastewater treatment facility expansion would have been paid for with increased utility bills or property taxes. Baxter voters already have approved a local option sales tax to pay for its city's share of the project. The Baxter sales tax went into effect Oct. 1.

Mike Larson, Brainerd Public Utilities wastewater supervisor, looked at a drawing of the expansion plans for the plant Tuesday. Brainerd residents were asked Tuesday to vote on a local option sales tax referendum. Brainerd Dispatch/ Nels Norquist » Purchase reprints of this photo.

Without a sales tax and with just an increase to utility bills, Brainerd residents would have paid about $360 more per year and businesses $815 more a year. A property-tax increase would mean an additional $237 per year for a $100,000 home, $474 for a $200,000 home, $1,006 for a $250,000 business and $2,190 for a $500,000 business.

The bonds used to pay for the wastewater treatment facility will be secured by the city's property taxes, which only would be used if the sales tax is unable to cover the cost of the project. It is anticipated a small increase in utility bills will be needed to help pay for the project.

MATT ERICKSON can be reached at matt.erickson@brainerddispatch.com or 855-5857.