Sviggum says local sales taxes problematic

Published 12:00 am Friday, May 24, 2002

The state legislature rejected of a half-percent local option sales tax because it lacks accountability and contradicts the idea of state aid to local governments, House speaker Steve Sviggum, R-Kenyon, said, explaining why the Albert Lea proposal was turned down.

“From a policy standpoint, the local sales tax has not always been the best policy,” said Sviggum.

One of catch phrases by the sales tax proponents is that about 30 percent of the purchases in Albert Lea are made by visitors.

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But that is the very reason why the sales tax is problematic, according to Sviggum.

“A good tax policy has a good connection between those who pay the tax and those who spend the revenues,” Sviggum said. “Everybody wants somebody to pay one’s revenue.” He is afraid that such a discrepancy would damage public accountability toward policy.

“I understand the local needs. But, everybody has an argument that they have a special, unique situation.”

Sviggum also stressed that the state provides Local Government Aid to mitigate the fiscal burden on local communities.

“We increased the LGA to Albert Lea significantly last year. That was a part of the philosophy of supporting the regional burden by the state,” he said.

In this session, the state legislature denied sales tax applications from 13 communities, while St. Cloud and surrounding cities were authorized for a three-year-term imposition.

Sviggum said that measure was to let the cities generate funds for expanding an airport, a vital project.

The half-percent sales tax will be designated to the airport improvement project, evolving it from a municipal airport to a regional one.

The bill says the cities can use the tax revenue for other projects such as the construction of public facilities and road improvements only when the airport renovation expense is met. Two cities, St. Cloud and Sartell, passed a referendum, and the remaining four cities will have one in November.

Rep. Dan Dorman, R-Albert Lea, said he would continue to pursue approval from the state legislature during the next session.

“There is no unified position,” he said. “Some people think it is bad, some think it’s good, some think it’s bad but people should have a right to make that decision. But I look at it as a local control issue.”