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Big hurdle cleared: Extension of local half-cent sales tax included in state omnibus bill

WORTHINGTON -- A bill that would authorize the city of Worthington to extend the life of its local option sales tax has been included in the omnibus tax bill for the Minnesota House and Senate.

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Additional money from a state-approved local option sales tax extension would go toward paying off reconstruction at Worthington's Buss Field, shown here Thursday. (Tim Middagh / Daily Globe)

WORTHINGTON - A bill that would authorize the city of Worthington to extend the life of its local option sales tax has been included in the omnibus tax bill for the Minnesota House and Senate.

 

The half-cent sales tax was enacted in 2008 after a referendum in which 60 percent of voters approved. It allowed the city to collect the special sales tax up to $6 million or for a maximum of 10 years, whichever came first, to fund construction of the Worthington Event Center and renovations at Memorial Auditorium Performing Arts Center.

However, the city collected more than expected, and will hit the $6 million cap this summer - about 22 months before the 10 years are up.

 

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The legislation included in the tax bill, authored by District 22 Sen. Bill Weber, R-Luverne, and District 22B Rep. Rod Hamilton, R-Mountain Lake, would allow the city to pass a resolution to keep collecting on the sales tax up to $7.3 million.

 

The additional money would go toward paying off Buss Field reconstruction and new seating at Memorial Auditorium.

 

City Administrator Steve Robinson said the bill was initially accepted in the Senate, but denied in the House. Members of the House were concerned about the original language of the bill, which had no limit on the amount of money the city could collect before the 10-year limit was up.

This week, the conference committee agreed to include the bill, amending the language to identify which specific specific projects it would fund as well as imposing a $7.3 million collection limit.

 

“It’s not a done deal, but it was a major hurdle to get into the tax bill,” Robinson said. “Not having support from the House meant there was a chance it wasn’t included.”

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The bill will be voted on by the House and Senate before being sent to Gov. Mark Dayton’s desk. Of all the budget battles going on, Robinson wasn’t worried the Worthington-specific legislation would be a political football.

 

“It would be very surprising that it would be a line item cut out of it, and I’ve had conversations with the governor’s staff and they don’t see any issues with it,” Robinson said.

 

The worry now becomes whether or not St. Paul can pass the bill - something that didn’t happen last year.

 

If the legislation passes, the Worthington City Council will be able to pass an ordinance allowing for the collection.

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Built in to the legislation is a clause that says Worthington residents can call for a referendum against the sales tax extension.

 

The city still intends to seek a new referendum once the sales tax expires in 2018 for a replacement local option sales tax, which once again will require approval from the Capitol.

 

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