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Bloomington Briefing Published February 28, 2022
Updated on February 28, 2022

Council seeks authority to ask voters for Bloomington sales tax

On January 24, the City Council passed a resolution asking the legislature to allow the City to put a new local sales tax on the ballot for residents to consider. The proposed Bloomington sales tax would be a 0.5% (one-half of one percent) added tax charged on retail sales in the city. The revenue collected by the sales tax would be used to provide funding to improve aging City facilities. This local sales tax would generate approximately $11 million each year over 20 years.

It is estimated that 75% of a Bloomington sales tax would be paid for by visitors, and 25% would be paid for by residents, according to an independent analysis by the University of Minnesota Extension Center for Community Vitality.

The new tax would only apply to items that are currently taxable, meaning that items such as clothes and staple groceries would not be taxed. Approximately 80 units of government in Minnesota currently have a local sales tax.

How would a Bloomington sales tax get approved?

The legislature will consider the request during the 2022 legislative session. If Bloomington’s request is passed by the state legislature this session, then the next step is a ballot question for Bloomington voters. Residents would have the opportunity to vote on a Bloomington sales tax for each project separately, most likely during this year’s November general election. If approved by Bloomington voters, the sales tax would go into effect by the second quarter of 2023.

What would the sales tax be used for?

Many of Bloomington’s most-used assets need significant investment or replacement. Four projects have been identified that could be funded through a Bloomington sales tax (estimated costs do not include interest or financing costs):

  • Bloomington Ice Garden renovation including a new roof, a new refrigeration system, locker room improvements, and other guest service and ADA improvements: $32 million estimated cost.
  • A new community health and wellness center to replace the Public Health building and Creekside Community Center: $70 million estimated cost.
  • Dwan Golf Course improvements including total replacement of the clubhouse as well as golf course and bunker improvements and on-course restrooms : $15 million estimated cost.
  • Bloomington Center for the Arts expansion that would add a concert hall and Schneider Theater updates: $33 million estimated cost.
What would these projects cost through this new city sales tax vs. property tax?

Funding these projects with a property tax would cost the average Bloomington homeowner $210 per year. Because 75% of the sales tax money is paid for by people visiting Bloomington, the estimated cost of the projects spread across the 38,000 households would lower the cost to about $72 per year.

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