We Make Minnesota urges St. Paul to consider long‑term revenue options: land value tax, urban wealth fund, local income tax

Eric Bernstein, coalition director for We Make Minnesota, told the St. Paul policy committee that persistent underfunding of public services constrains cities and urged consideration of long‑term revenue and land‑use strategies, including land value taxation and an urban wealth fund.

“Local government is extremely important, state and local, but especially locals where the rubber meets the road,” Bernstein told the committee, framing his remarks with international comparisons showing the United States raises and spends less tax revenue as a share of GDP than many other OECD countries.

Bernstein walked committee members through revenue trends for St. Paul and Minneapolis, showing St. Paul’s general fund revenue mix and noting property taxes are the largest municipal revenue source but that tax increment financing can obscure the underlying base. He said city spending growth since 2013 has lagged measures of personal income growth and inflation, and highlighted that the city’s budget and tax structure will face long‑term pressure from demographic shifts such as an aging population.

On specific policy tools, Bernstein recommended exploring a land value tax that would tax the value of land separate from structures to incentivize density; he cited studies suggesting a 5–10% increase in density in jurisdictions that experimented with land value‑style taxation. He also recommended exploring an urban wealth fund to better use publicly owned land and assets to generate recurring revenue and support affordable housing and public enterprise.

Bernstein discussed local income taxes as another tool — noting tradeoffs and the need for clearer long‑term revenue commitments — and urged the council to think beyond near‑term fixes. He encouraged officials to track gaps between city costs and state fee caps and to place long‑term revenue ideas on the legislative agenda if local fees fail to cover enforcement costs.

Council members asked for demographic analysis — for example, the share of homeowners who are retirees or who have paid off mortgages — and for follow‑up materials that break down costs, progressivity and distributional impacts. Bernstein said he would provide additional materials and welcomed further conversations with staff and council members.

The presentation concluded with a call to treat fiscal policymaking as long‑term stewardship: Bernstein asked the council to consider structural reforms that reshape how the city captures value from land and public assets rather than relying solely on short‑term patches.

The committee thanked Bernstein and requested additional data and follow‑up on recommendations including land value taxation, urban wealth funds and potential local income tax design.