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'City Tax'

Sep 28

Press Release: City Leaders Seek New Option to Fund Priority Projects - Jan. 26, 2023

Posted to City of Monticello - Press Releases on September 28, 2023 at 11:07 AM by Haley Foster

DATE:           January 26, 2023
                      For Immediate Release

CONTACT:  Rachel Leonard
                     (763) 295-2711 | Rachel.Leonard@ci.monticello.mn.us

City Leaders Seek New Option to Fund Priority Projects

On Monday, January 23 the City Council initiated the process to seek a local option sales tax (L.O.S.T.) in Monticello. This type of funding source has been gaining popularity across Minnesota as cities seek ways to facilitate big projects in their communities. 

Rather than limiting cities to only the taxpayers within their city limits, a sales tax allows revenue to be generated from people shopping in the community. As a regional commercial center, Monticello stands to benefit from a tax that includes contributions from the people drawn to the community from across Central Minnesota. 

The funds must be used for projects valuable to the greater region, and Monticello has identified two large-scale projects with regional significance: Bertram Chain of Lakes Regional Athletic Park and The Pointes at Cedar Recreation Area. 

Bertram Chain of Lakes Regional Athletic Park is already a regional destination for recreation. The initial phases of construction created space for regional regular season play as well as tournament play, bringing in teams from across the state. The completion of the first phase of premiere fields allowed the Minnesota Youth Soccer Association to host the 2021 State Soccer Tournament at the park.

The Pointes at Cedar is a more recent project. It’s intended to mix residential, commercial, and recreational spaces within a 100-acre development area. The project is anchored by a large central lake surrounded by pathways, art, and entertainment that will add a unique flair to the center of the community. 

The City Council is committed to phased development of both projects, but the proposed tax would be a transformational funding opportunity. It will create a specific source to finance future phases of the projects to ensure they can continue to develop for public use. 

The City Council resolution outlines a ½ cent sales tax that would be in place for a maximum of 20 years. This would generate $30 million that would be split evenly to fund $15 million for each project. State law requires the tax to automatically sunset once funds authorized for the projects are collected, or the proposed 20 years (pending approved legislation), whichever occurs first.

The approved resolution does not enact the tax, it allows the City of Monticello to submit a request for special legislation from the Minnesota Legislature. If the legislature approves it, the Council must vote on a second resolution to present funding the two projects with the proposed sales tax. Monticello voters would vote for funding each project individually, allowing for both, one, or none of the projects to be funded with the tax.

Local option sales taxes apply to the same items and services as the general state sales tax. Items exempt from the local sales tax include many essential items such as groceries, prescription and over-the-counter medications, baby products and clothing (here is a complete list of non-taxable items, from MN Dept. of Revenue).

During the meeting, staff also noted that regardless of the funding source, the plan is to pursue phased, needs-based development of both projects. City Administrator Rachel Leonard highlighted that a potential sales tax does not mean immediately completing a full build-out of the recreation facilities. 

“The idea is we keep looking at the needs of the community and how we can phase this in a responsible way. The sales tax gives us the option to either save that money over time and then pay it out when we decide to do another phase of the projects, or we can use that funding to pay the bond costs if we were to levy debt to complete those projects,” explained Leonard.

Prior to voting on the resolution, members of City Council voiced their opinions about the proposed funding source. 

“I think it’s reasonable to expect that a project like Bertram, that’s being utilized by more than just the residents of Monticello,” said Mayor Lloyd Hilgart. “This should be the type of thing that the sales tax is used for. Same with The Pointes, I feel that’s going to be a regional draw for the recreation and shopping that it will have,” he added.

Councilmember Hinz agreed, stating she felt like it was good for the city to have the experience.

“I think this is an excellent opportunity, regardless of the outcome, for the city to walk through the steps of this process. And also for our community to better understand their ability to influence the outcome by learning what they’re voting for. I think it’s a great first step,” said Hinz.

City staff will submit project plans for The Pointes and Bertram, as well as a breakdown of the proposed financial components to the MN state legislature by the deadline of January 31, 2023.

Apr 25

Council Highlights - Monticello Local Option Sales Tax Analysis - April 24, 2023

Posted to Monticello City Council Highlights on April 25, 2023 at 2:45 PM by Haley Foster

U of M Analysis of a Local Option Sales Tax in MonticelloLOST 68.6% Non Residents

In February, the City of Monticello engaged the University of Minnesota Extension Center for Community Vitality to analyze the potential impact of a Local Option Sales Tax in our community. Specifically, we were seeking data estimating the contributions of residents and non-residents. On Monday, April 24 those results were presented to the City Council.

The results of their analysis help explain why the City of Monticello is considering a Local Option Sales Tax. Using per capita sales in Minnesota, the Monticello population, and the index of income in their methodology, they estimate 31.4% of revenue for the local option sales tax would come from residents, while 68.6% would come from non-residents

This equates to about $30.41 per resident each year while the City of Monticello would receive an estimated $1.4 million per year to help fund the Bertram Regional Athletic Park and The Pointes at Cedar Recreation Area.

The U of M's full report, as well as highlights from the report are available on our website.LOST $30 Per Resident, Per Year

What would the Local Option Sales Tax be used for?

The funds raised by a Local Option Sales Tax must be used for projects valuable to the greater region. Monticello has identified two large-scale projects with regional significance: Bertram Chain of Lakes Regional Athletic Park and The Pointes at Cedar Recreation Area.

Bertram Chain of Lakes Regional Athletic Park is already a regional destination for recreation. The initial phases of construction created space for regional regular season and tournament play, bringing teams to Monticello from across the state.

The Pointes at Cedar is a more recent project. It’s intended to mix residential, commercial, and recreational spaces within a 100-acre development area. The project is anchored by a large central lake surrounded by pathways, art, and entertainment that will add a unique flair to the center of the community.

The City Council is committed to phased development of both projects, but a sales tax would be a transformational funding opportunity. It would create a specific source to finance future phases of the projects to ensure they can continue to develop for public use. To learn more about each project and why we believe they are regionally significant to our area, visit our website.

The approved City Council resolution from January 23, 2023 outlines a half (½) cent sales tax that would be in place for a maximum of 20 years. This would generate $30 million that would be split evenly to fund $15 million for each project. State law requires the tax to automatically sunset once funds authorized for the projects are collected, or the proposed 20 years (pending approved legislation), whichever occurs first. Local option sales taxes apply to the same items and services as the general state sales tax.

 When I'm running errands or grocery shopping what would I be taxed on?

You WOULD NOT be taxed on:

  • groceries/food
  • baby products
  • prescription/nonprescription medication
  • clothing
  • water
  • certain agriculture purchases such as poultry feed
  • Vehicle sales/purchases, vehicle maintenance labor costs

You WOULD be taxed on:

  • soft drinks: pop, coffee, tea drinks that contain sweeteners
  • candy
  • dining out/take-out orders
  • vending machine sales
  • tobacco products (except cigarettes)
  • building materials
  • Vehicle leases/rentals, vehicle parts
  • Vehicle washing/cleaning services
  • Pet grooming/boarding
  • Pay television services (Cable/Satellite)

To view a full list of non-taxable and taxable items, visit: www.revenue.state.mn.us/guide/nontaxable-sales


LOST Exempt 1


Dec 06

Proposed 2023 Budget & Property Tax Levy

Posted to City Spotlight on December 6, 2022 at 11:09 AM by Haley Foster

The proposed 2023 budget and property tax levy will be presented at a public hearing on December 12, 2022. It will begin with a short presentation followed by an opportunity for residents and property owners to comment and ask questions about the 2023 tax levy and budget. The public hearing is part of the regular City Council meeting at 6:30 p.m. in the Mississippi Room at the Monticello Community Center.2023 Tax Levy Graph

The proposed city levy of $12,050,000 represents a 6.1% increase (or $697,000) over the 2022 city levy. The HRA levy for 2023 is proposed at $402,000, or $14,000 (3.6%) more than 2022. The total combined levy amount is $12,452,000 or a 6.1% increase.

The impact of the proposed levy on individual properties was listed in the Truth-in-Taxation (TNT) notices sent by Wright County in November. Your notice shows changes to the levies, your property value, homestead exclusion, and any other changes to the tax base. New for the 2023 taxes payable year, local governments are required to report summary budget information with the TNT notices. Wright County compiled information from the County, City, and School District to include in a one-page insert. There’s a lot of information in a limited space, so property owners are encouraged to reach out to the appropriate jurisdiction with any questions on the summary information. Please note, the 2023 proposed budget information will not be final because we continue to refine it until the final budget is approved on December 12, 2022.

This year residential market values increased by an average of 20% over the prior year. As a result, residential taxpayers should expect to see an increase in their city property taxes that exceeds the percentage increase in the levy. City Council held several budget workshops over the summer of 2022 to discuss the city’s projected costs in light of the current economic environment and weighed budgetary needs with the associated tax burden on property owners in the community.Property Taxes at Work in our Community

What are my Property Taxes used for?

 The property tax levy is used in four ways. About 1/3 of the funds are used to make the City’s debt payments, fund capital projects, and support the Monticello Community Center. The remainder of the levy is put into the General Fund.

The General Fund pays for city services like public safety, including the Fire Department and contract with Wright County Sheriff’s Office; snow and ice removal; and funding city departments like finance, planning and zoning, parks and recreation, and parts of public works. Overall, the tax levy helps us fund larger projects over time as well as complete our day-to-day operations on behalf of the public.