Local Sales Tax Option

On November 2, 2021 eligible Saint Peter voters will consider a ballot question to finance construction of a new fire station.  The information below is presented for your information.


Ballot Question: Shall the City of Saint Peter, Minnesota be authorized to finance the construction of a new fire station in the City by imposing a sales and use tax of one-half of one percent (0.5%)? Local Sales Tax Option Sample Ballot 

We all want to know how implementation of a local option sales tax will impact our personal budget.  The information below shows the impact on property taxes should the sales tax question be voted down.  The table shows how much your family would need to buy in taxable items to equal the amount of property tax increase if no sales tax was put in place.  For example…if there was no sales tax, owners of a $150,000 house would pay an additional $70.29 per year in property taxes to fund construction of the Fire Station.  If the sales tax was implemented (meaning no property tax increase), property owners would have to buy $14,057 in taxable items per year in Saint Peter to equal that same amount.  It may be important to note that even people that do not pay property taxes will most likely buy things and pay sales tax. 

Table 1 - Property tax impact without sales tax Tax Impact Analysis  Fire Hall 2021 Opens in new window


The second table (shown below) shows the amount of sales tax expected to be generated in each year based on information provided by the Minnesota Department of Revenue.  As you see, the sales tax is expected to be more than needed to pay the annual debt service costs.

Table 2 - Sales tax generated by taxable sales in Saint Peter to pay for Fire StationTax Impact Analysis Sales Tax Fire Hall 2021 Opens in new window
Fire Station Location Study
FIRE STATION RENDERING
FIRE STATION FLOOR PLAN

Local Sales Tax Option Frequently Asked Questions:

  If approved by voters how much of a sales tax increase can I expect?

The current sales tax in Saint Peter is 7.375%.  If approved, that amount would increase to 7.875%.

  What would the money be used for?

All money generated by the sales tax, if approved, can only be used for repayment of the debt on the new Fire Station. 

    Will sales tax cover all of the debt or will I have to pay more in property tax also?

Current data indicates sales tax proceeds should cover the entire debt and there should be no use of property tax dollars. 

    What will the new Fire Station cost and how long will I need to pay sales tax?

The project budget, based on a needs study, is $9.4 million with approximately $358,000 in annual debt service.  Currently the bond with the USDA is set for 40 years.  If the sales tax is collected at a higher rate that $358,000 annual debt service then the debt will be paid off sooner than 40 years and the Sales Tax will be stopped.

    Why is the City building a new fire station?

The current building, which was built in the late 1920’s, has a square footage of 8,100.  Modern fire trucks won’t fit in the building and there is no space for needed equipment, Firefighter training, and decontamination facilities that are needed to address firefighter health and safety needs.  The proposed building is approximately 27,000 square feet. 

    Where is the new fire station being constructed?

The new location - at the northwest corner of Sunrise Drive/Broadway Avenue - encompasses approximately 4.5 acres.

    What’s the timeline for the project?

Bidding will occur in February/March 2022 and construction is expected to be completed in late 2022 or early 2023.