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St. Paul seeks to extend half‑cent sales tax, raise bonding cap and change STAR board appointment process
Summary
Senate File 2657 would extend and expand St. Paul's half‑cent local sales tax program (Neighborhood STAR and Cultural STAR), increase the bonding cap backed by the tax and allow the city more control over STAR board appointments; city officials said the program funded hundreds of projects and kept the Xcel Energy Center complex updated.
Senator John Pappas presented Senate File 2657, a bill to extend St. Paul's half‑cent local sales tax authority, raise the bonding cap secured by that revenue and modify statutory rules for Neighborhood STAR board appointments.
Under current law the half‑cent sales tax was authorized in 1993 to fund capital work at the St. Paul Arena and River Center convention assets and to create the Neighborhood STAR and Cultural STAR grant programs. The bill would extend the expiration date from Dec. 31, 2042, to Dec. 31, 2060, and increase maximum bonding backed by the tax from $130 million (current additional authorization) to $500 million in total debt capacity (including debt already issued), according to the bill language presented.
St. Paul Finance Director John McCarthy testified the STAR program has funded hundreds of neighborhood and cultural investments (for example, grants to the Minnesota Children's Museum, Indigenous Roots and other organizations) and provided capital repairs at the arena and convention center, including roof and accessibility work. Council President Rebecca Naker (testifying remotely) said extending the tax is "vital" to preserve investment in the arena complex, which draws statewide visitors.
Senator Pappas said the bill also would give the city flexibility to set the size and appointment process for the Neighborhood STAR citizen board (removing a statutory requirement for three residents from each council ward) because the current 21‑member board often lacks quorum. The bill's A4 amendment was modified in committee to retain an 80/20 revenue split referenced earlier in the bill language by deleting competing language from the amendment; that modification and the broader bill drew questions about the local approval process and whether the measure would run afoul of the statutory moratorium on certain local tax changes.
Committee counsel and members discussed the moratorium issue; counsel advised the bill's effective‑date provisions and local approval requirements determine compliance with the moratorium. McCarthy and Council President Naker said the city has used STAR funds extensively for neighborhood and cultural grants and to maintain the arena complex and requested legislative authority to continue that work. The bill was laid over for further consideration.
