Purpose

This bill would modify how Baxter can impose and use a local sales tax. It authorizes changes to use the tax revenues for water and wastewater projects for Brainerd and Baxter, a new fire substation, and broader capital and infrastructure investments, with voter approval required for certain allocations.

Main Provisions

• Use of tax revenues for administration and project costs:
  • Revenues from the tax must be used to pay for the cost of collecting and administering the tax, and to finance the acquisition and improvement of water and wastewater facilities serving Brainerd and Baxter.
  • Funds may also be used for building and equipping a fire substation, as approved by voters in a referendum.
  • Authorized costs include acquiring property and paying construction and engineering costs related to these projects.
• Capital Infrastructure Fund (up to $40 million):
  • Baxter may, with voter approval, allocate up to $40,000,000 of tax revenues to a capital infrastructure fund.
  • Money from this fund can be used for:
  • Sanitary sewer, storm sewer, and water projects.
  • Transportation safety improvements.
  • Improvements to the Brainerd Lakes Area Airport.
• Additional project authority (debt, bonds, and city projects):
  • In addition to the above, Baxter may allocate revenues to pay for other city projects, including the costs of collecting and administering the tax and debt service on bonds.
  • Specific project allocations include (subject to voter approval and required references to law):
  • Up to $15,000,000 for upgrades and improvements to water and wastewater utility systems.
  • Up to $16,000,000 for improvements to street infrastructure and safety improvements to streets affected by regional Highways 371 and 210.
  • Up to $10,000,000 for construction of a new public safety facility.

Changes to Existing Law

• The bill amends Laws 2006, chapter 259, article 3, section 10, subdivision 3 (as amended), to expand the uses of Baxter’s local sales tax receipts beyond the original authorized purposes.
• It adds authorization to create and fund a capital infrastructure fund and to allocate funds to additional city projects, including debt service on bonds.
• It allows allocations subject to voter approval at elections (referendum) and clarifies that revenues may be used for costs of collecting and administering the tax as well as for infrastructure and public safety projects.
• It references existing state statutes (e.g., Minnesota Statutes 297A.99) and provides exceptions to enable these broader uses.

Governing and Voter Approval

• Many of the new allocations require approval by voters in a referendum.
• The changes specify that certain capital and project expenditures are contingent on voter authorization.

Fiscal Impact (Summary)

• Potentially larger, multiyear investments in water/wastewater, streets, airport, and public safety facilities.
• Creates a framework for a dedicated capital infrastructure fund with up to $40 million for specified projects.
• Enables ongoing debt financing (bond financing) for the listed projects, with debt service funded by the tax revenues.

Practical Effect for Residents

• Baxter’s local sales tax could fund a broader set of projects than before, including essential water and sewer upgrades, street and safety improvements, airport enhancements, and a new public safety facility.
• Major uses require voter approval, giving residents a direct say in how funds are spent.

Relevant Terms local sales tax; revenues; administration costs; water and wastewater facilities; Brainerd; Baxter; fire substation; capital infrastructure fund; sanitary sewer; storm sewer; street infrastructure; transportation safety improvements; Brainerd Lakes Area Airport; debt service; bonds; property acquisition; construction costs; engineering costs; voter referendum; approval by voters; Minnesota Statutes 297A.99; authorization to impose tax.