Two Tax Increases Before St. Cloud Voters This Election

(KNSI) – There will be two ballot questions before St. Cloud voters on November 8th. Mayor Dave Kleis spoke with KNSI’s Bob Hughes Tuesday about both.

The first is a half-cent sales tax increase for renovations at the Municipal Athletic Complex, expected to raise roughly $21 million. Kleis explains why the sales tax is the appropriate revenue source for the facility.

“When it comes to these regional facilities like the Municipal Athletic Complex, that’s what the sales tax is [for]. That’s a half-cent. That’s used by more people than live in St. Cloud. I mean, far greater. So why should the property taxpayer pay for that facility? That’s where you use sales tax because people come in into a community. They go to a hotel or motel, they buy stuff. That’s what’s helping to pay for that. That’s a regional thing.”

Kleis says the other is a bonding issue to make park system improvements, which is funded through property taxes. Kleis says public support could actually lower costs as it tends to attract private investment as well.

“We can’t use sales tax on these neighborhood projects, that’s the problem. So there’s only one way to do it and that’s with either private donations and that’s what we’re trying to do too. If we can bond for 20 million, we can leverage another 20 million in private donations so boom, you get twice the bang for the buck because people are willing to give if they know they can match it and we can do something.”

The improvements could cost as much as $20 million. Interest rates for municipal bonds are rising. St. Cloud just placed $4.6 million in debt in a sale recently at 3.58%. That is up from one to two percent for most of the last five years.

St. Cloud enjoys an investment grade bond rating of AA+. The excellent rating allows the city to borrow at a lower cost than most other municipalities.

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