Duluth city councilors want to turn street light fee into tax

• Street lights

File / News Tribune

Talk about it

Debate over Duluth’s street light fee has flickered back to life again.

The Duluth City Council recently voted to request the Minnesota Legislature consider a change in state law that would enable the community to replace its current street light fee system with a street light tax, which would essentially be a dedicated property tax.

“What we are doing is more like a tax than a fee anyhow,” said Councilor Jim Stauber, who made the proposal. “If it’s a tax, citizens would at least have the opportunity to use it as a tax deduction.”

As of this year, each Duluth residential household will pay a $5 monthly fee on its utility bills to cover the cost of operating, maintaining and upgrading the efficiency of city street lights. Meanwhile, businesses pay a higher street light fee, up to a maximum of $54 per month, based on the amount of impervious surface they own.

The street light fee applies to all property owners in the community, including tax-exempt entities such as colleges, universities and religious organizations. If the city switches back to a property tax-based system, it will shrink the total fee base by about 4 to 5 percent, said David Montgomery, Duluth’s chief administrative officer. That burden probably would then need to be shifted to residential and commercial property owners.

Council President Dan Hartman questioned whether it was appropriate for the city to seek payment from nonprofit, tax-exempt organizations in the first place.

He also wondered, “Why are street lights our No. 1 priority for a fee? Our water system is in a state of downfall, and our streets are terrible.”

Emily Larson, who was recently elected to her first term on the City Council, said that when she was out campaigning, she “got a ton of questions about the street lighting fee.”

She said many people weren’t clear exactly what they were receiving in return for the fee payments.

“I heard frustration from people who thought they were being both taxed and ‘fee-d’ for something that should be part of their general taxes,” Larson said.

Even though he didn’t support Stauber’s proposal, Councilor Garry Krause said he is no fan of the street light fee.

“It’s offensive, because people feel they’re already paying for lights with their property taxes,” he said.

Cindy Lillegard, a Duluth native, said she didn’t make a fuss over the monthly $3 street light fee when it was introduced, but she was none too pleased to see the charge increase to $5 this January.

“Once they got the fee in there, they said let’s just up it. And we didn’t have any say,” she said.

Larson suggested it might be a more understandable and transparent system to have a traditional property tax fund the street light improvements.

Montgomery contends that charging a monthly fee expressly for street lights makes it easy for citizens to track where their money is going.

“It keeps that cost right in front of people. It’s the very definition of transparency,” he said.

“When you break things out like that, they can become a lightning rod, because you can point to it. But then again, you can point to it,” Montgomery said.

He acknowledged street light work could be funded in other ways, as well, but said the fee system seemed to be serving the city well.

Neither Sen. Roger Reinert nor Rep. Kerry Gauthier, both DFL-Duluth, was yet familiar with the pending legislative request from the City Council. However, each said it would be highly unlikely to win support for the proposed new tax in a Republican-led Legislature, particularly given lawmakers’ preoccupation with a bonding bill during a shorter-than-usual session.

“If the state were willing to go for that, it would be fantastic,” Hartman said. “But even if it doesn’t, we’re sending a message to the city administration.”

Hartman voiced his personal preference for a traditional property tax versus a street light fee, but suggested perhaps the choice might best be made by voters through a referendum.

The Duluth City Council voted 6-3 in favor of Stauber’s legislative proposal on Jan. 17, with councilors Krause, Jay Fosle and Linda Krug in the minority.

Tags: city council, news, duluth, money