BLUE EARTH — The Blue Earth City Council on Monday discussed creating a sales tax for the city.

The proposed tax is for 25 years at a 0.5 percent rate.

According to City Administrator Tim Ibisch, the sales tax would generate $165,000 annually, based on last year’s sales figures.

Ibisch said the 0.5 percent sales tax is not uncommon for cities in the area. Albert Lea, Mankato and Fairmont also have a 0.5 percent sales tax.

“Personally, if all the other communities around us didn’t already have one, maybe I wouldn’t feel as comfortable with it,” Ibisch said.

Council member Dan Warner said he doesn’t believe the sales tax would deter people from shopping in Blue Earth.

Ibisch expressed the importance of choosing specific departments or projects to use the funds generated by a sales tax, so as to remain honest with taxpayers about how the money is spent. While it is yet to be decided, the council talked about using the funds for the wastewater treatment plant, street projects, and parks and recreation.

Council member John Huisman said funding departments and projects through the sales tax could possibly keep the property tax levy down in the future.

The sales tax would be voted on by residents in the general election in 2018. If passed, the tax would likely be authorized for the spring of 2019, with it starting in the fall of 2019.

The council showed overall support for the sales tax. With the goal to finalize the sales tax by the end of February, Mayor Richard Scholtes suggested the council table discussion until the first February meeting.

The next council meeting is scheduled for 5 p.m. Jan. 16.