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BLUE EARTH -- On Monday, the Blue Earth City Council discussed the possibility of a sales tax, looking into the process of putting one into effect and what it would mean for the city.
The idea of a local sales tax for Blue Earth came about at the previous council meeting, when Council member John Huisman mentioned that a couple of downtown business owners had talked to him about it.
A local sales tax would apply to all sales made in the local taxing area, according to the Minnesota Department of Revenue. The funds from the tax would then go to designated services or special projects, such as road and street maintenance.
Many cities within Faribault County and surrounding areas currently impose a sales tax, said Timothy Ibisch, city administrator. Because of this, he said, it is possible to have a sales tax in Blue Earth.
"I do think realistically it is in the realm of consideration," he said.
As of right now, the council is looking at a 0.5 percent sales tax. This figure is based on the sales tax of surrounding cities, such as Albert Lea, Fairmont and Mankato.
Because a sales tax ordinance is still in the works, Ibisch said it has not been decided what the funds would be used for.
For the sales tax to go into effect, it would first have to be passed by the council and would then be voted on by Blue Earth residents in a referendum. If passed in the referendum, it would then go to the Minnesota Legislature for approval.
Because there is a 90-day requirement between the passing of the ordinance and a general election, the ordinance may not be voted on by the public until the next general election in 2018, according to City Attorney David Frundt. If passed, said Ibisch, the earliest the sales tax could be enacted would be the fall of 2019.
Ibisch said this timeline allows for the council to further discuss the details of the ordinance and whether a local option sales tax is right for Blue Earth.
In other action on Monday, the City Council:
o Approved a road closure permit to close Midway Road to vehicle traffic for "The Last Ride" fundraising event.
o Passed an ordinance to vacate portions of Hood Street, Third Street Northwest, Park Street and North Grant Street.