St. Paul extends Half Cent sales tax to fund city projects through 2060

St. Paul is set to enhance its economic and cultural landscape following a significant decision by the Minnesota Senate's Committee on Taxes. During a meeting on April 22, 2025, the committee discussed Senate File 2657, which proposes to extend the city's half-cent local sales tax and increase its bonding authority, a move that could have lasting impacts on the community.

Originally authorized in 1993, the half-cent sales tax has been a vital funding source for the St. Paul Civic Center Complex, now known as the Xcel Energy Center Arena Complex, and various neighborhood development projects. The proposed legislation aims to raise the bonding cap from $130 million to $500 million and extend the tax's expiration date from December 31, 2042, to December 31, 2060. This extension is crucial for maintaining and improving city-owned facilities and supporting ongoing economic development initiatives.

John McCarthy, St. Paul’s City Finance Director, highlighted the importance of the Neighborhood STAR and Cultural STAR programs, which have funded numerous projects, including renovations of local theaters and cultural organizations. These programs have generated hundreds of millions of dollars in investments, significantly contributing to the city’s growth and vibrancy.

Council President Rebecca Naker emphasized the necessity of continued investment in the Xcel Energy Center, noting its role as a major economic driver for the city. She also advocated for local control over the composition of the STAR board, which currently consists of 21 members, arguing that a smaller, more manageable board would enhance efficiency and responsiveness to community needs.

The committee's discussions also touched on concerns regarding the geographic balance of the STAR board, with some members expressing the need for diverse representation to ensure all community voices are heard in decision-making processes.

As the bill moves forward, it promises to bolster St. Paul’s economic development efforts and cultural investments, ensuring that the city remains a vibrant hub for residents and visitors alike. The next steps will involve further deliberations and potential adjustments to the proposed changes, with local approval required before implementation.