The details of a proposed conference committee omnibus tax bill came to light Thursday - and the pending legislation bodes well for Duluth's efforts to step up street repairs and support the growth of the city's downtown medical district.
The bill still awaits action in a special session, slated to convene Friday, but if it passes, the legislation would fund about $98 million worth of public infrastructure improvements in a medical district where Essentia Health and St. Luke’s already are laying plans to invest more than $1 billion, combined.
The bill also would grant the Duluth City Council authority to increase the local sales tax by a half-percent, with the proceeds to be dedicated for street improvements. If approved, the sales tax is expected to generate about $7 million annually.
In November of 2017, about 76 percent of local voters cast referendum ballots in support of the increased sales tax, with the caveat that all the additional collections be earmarked exclusively to improve local streets.
Duluth Mayor Emily Larson said she has made about two dozen trips to St. Paul this session to meet with lawmakers and offer testimony in support of the city's requests.
"My job is to continue to show up and make it incredibly difficult to disrespect or dishonor the will of an electorate who has a plan," she said.
The medical district funding, while substantial, is significantly smaller than the $164 million the city originally had sought from the state, but Sen. Erik Simonson, DFL-Duluth, said it reflects the political realities of operating as a member of a minority party.
"Divided government is always a challenge, but you figure out how to get things done. You figure out how to work across the aisle. You figure out how to create those relationships, and those relationships become very important as you get toward the end," he said.
"We have massaged that bill throughout the course of this session, trying to make sure it gets to where folks are comfortable with it on both sides of the aisle, and we feel like we're at a place where that actually has a chance. The governor has been an extreme champion for that project, and the mayor, as she said, has been down many times advocating for bonding on behalf of that," Simonson said.
While both Essentia and St. Luke's remain committed to investing heavily in their downtown medical campuses regardless of what happens in St. Paul this session, Larson said: "This bill is one of the ways that we can ensure public benefit from private investment. So, it's one of the ways that we can embed our district energy system, that we can do connectivity, that we can ensure that the needs of the community - the walkability, the livability, the workforce and the housing - also get met."
Simonson agreed, saying: "I think more and more legislators are beginning to understand that we have to start maximizing the opportunities for these private/public partnerships."
Rundown of proposed state support for Duluth medical district
• $13 million to add two levels to an existing medical district parking ramp and to replace a skywalk connection
• $36.4 million to build a 1,400-stall parking ramp to serve Essentia
• $5.9 million to extend Sixth Avenue East from Second Street to First Street
• $10 million to demolish an existing hospital for site reuse
• $11.4 million for roadway, utility and site improvements to support Essentia's growth
• $7 million for district energy infrastructure
• $14 million for a 400-stall parking ramp to support St. Luke's
Total public investment: $97.7 million