Duluth taxpayers had good reason to feel a bit betrayed last week when the City Council approved the streets and bridges eligible for funding from the city’s new half-percent sales tax.
Two years ago, voters overwhelmingly endorsed the sales tax and the estimated $7 million a year it would generate to fix our aging, crumbling neighborhood streets. There was broad support for increasing city spending for street maintenance from an inadequate $3 million a year to a still-inadequate-but-much-better $10 million a year.
Duluthians now, however, have learned that some of the money already is spoken for. Rather than being spent in neighborhoods across the city, $500,000 of the $7 million a year — a total of $5 million over 10 years — is earmarked for road repairs specifically in Duluth’s hospital district. While Essentia Health and St. Luke’s plan to privately invest nearly $1 billion to completely makeover their medical campuses, the half-percent sales tax money is part of public funds lined up in support. Another $500,000 from the city’s utilities fund for utilities projects in the district and $100 million from the state are also part of the matching public support.
Public support for such a significant private investment is appropriate, no doubt. But there was no talk of tapping street-repair tax dollars back in 2017 when Duluthians were being wooed to vote in support. And that voter support was pointed to repeatedly as a key to winning legislative approval so the city could create the new tax.
So who proposed using the new sales tax for the medical district? And when?
“That gets proposed by the Legislature,” Mayor Emily Larson said last week in an exclusive interview with members of the News Tribune Editorial Board. “(Getting state funding support for an undertaking like the Duluth medical district makeover) is going to require some kind of local match. That’s just the nature of how some of that works.”
Originally, two legislative sessions ago, lawmakers sought $250,000 a year from the city’s general fund and $30 million over 10 years from the utilities fund. But, “Those were not options,” the mayor said. “Those were not commitments we could make.” That original proposal was rejected.
Passed by lawmakers this year, and endorsed last week by the City Council, was the $500,000 a year from the new half-percent sales tax for street improvements in the medical district and $500,000 a year from the utilities fund for steam heat, water, and other utilities improvements in the medical district, according to the mayor.
“That’s really reasonable,” Larson contended. “That really is an equitable distribution and keeping within the spirit of what we need to do as a city to get projects done. … This is how the referendum was intended to be used. (It) was to work on streets across the city.”
Forgive voters if they don’t entirely agree this was reasonable or equitable. They supported a tax to fix streets in their neighborhoods. They didn’t endorse diverting any percentage of the tax, even a relatively small 7 percent, to what’s largely a business district where few of us live. So forgive voters, too, if they feel a bit betrayed.
Yes, the sales tax money going to the medical district will still be used to fix streets, as is its purpose. And, encouragingly, how the rest of the tax money gets spent will be decided by our elected city councilors following an inclusive, annual, and “very robust public process,” Larson promised.
“Every single project has to be approved by the Planning Commission, has to be approved by the City Council. So that is still in place,” she said.
Duluth taxpayers can insist that transparency also is in place when it comes to the city’s street-improvement program — far more transparency than this time.