Local sales tax figures looking good so far
MARSHALL – It’s been roughly a year since the first of three new local sales taxes went into effect in Marshall, and local officials say the results so far are good news for construction of a regional sports center.
Marshall City Administrator Ben Martig presented quarterly sales tax figures for 2013 to the Marshall City Council this week, and sales tax collections in 2013 were better than expected, he said.
The sales tax revenues will help fund construction of a regional amateur sports center and expansions to the Minnesota Emergency Response and Industrial Training (MERIT) Center in Marshall.
“It’s great news for the community that this is working out as anticipated,” Roger Madison, chairman of the Southwest Minnesota Amateur Sports Commission, said this week. If revenue levels continue to do well, it will help make the sports center a draw for the Marshall area, he said.
While the numbers are a positive sign, Martig and Madison said supporters of the regional sports center will still need to pursue state funding in order to build features, like a second sheet of ice.
Marshall put three local sales taxes into effect in 2013: a one-half percent general sales tax, a 1.5 percent lodging tax and a 1.5 percent tax on prepared food and beverages. The taxes are meant to generate capital and operating revenue for the regional sports center being planned for Marshall, as well as expansions to the Minnesota Emergency Response and Industrial Training (MERIT) Center.
Comparing year-to-year totals isn’t really possible yet for the local taxes. The one-half percent general sales tax went into effect in April 2013, and the 1.5 percent lodging and food and beverage taxes went into effect last summer. And because the state of Minnesota acts as the collector for the general sales and food and beverage taxes, there’s a short delay before the city receives the full tax payments, Martig said. However, quarterly tax totals with initial estimates shows the actual taxes collected are close to, or even above, predictions.
“It’s very good news for the (sports center) project,” Martig said.
A total of $47,176 in lodging taxes was collected in 2013, Martig said. In both the second and third quarters of the year, actual taxes ended up being fairly close to estimates. In the fourth quarter, however, the city collected $19,487 in lodging taxes, compared to an estimate of $16,279.
The city collected a total of $206,531 in food and beverage taxes in 2013. While actual taxes collected were about $6,000 below estimate for the third quarter of the year, the total for the fourth quarter was higher than expected. A total of $106,688 in food and beverage taxes was collected in the fourth quarter, compared to an estimate of $98,330.
While the half-percent general sales tax brought in less revenue than expected at first, it ended up bringing in more than expected in the third and fourth quarters of 2013. A total of $989,598 in general sales taxes was collected last year.
While totals aren’t complete for all of 2014 so far, Martig said, the city did receive $11,979 in lodging taxes for January and February, $31,447 in food and beverage taxes in January, and $105,289 in general sales tax for January.
Martig said the projections for the sales tax totals were made with the help of financial consulting firm Springsted, and will be the same projections used in the bonding process for the sports center and MERIT Center expansion. Martig said he expected the city council will take action on the bonds sometime in the next two months.
Supporters of the sports center and MERIT Center projects say that while the local sales taxes appear to be generating the revenue they’re supposed to, additional funding is needed to build the full range of features planned for them. Without state funding, construction may have to proceed on a scaled-back version of the sports center, with one ice arena instead of two. A driving track for training at the MERIT Center would also have to be scaled back.
All phases of the sports center and MERIT Center projects will be built, Madison said, but additional state funding could help it get done now, instead of later.
“We will do it, one way or another,” he said.
For now, Madison said, supporters are waiting to see how the Minnesota Legislature responds to funding requests. The sports center project was included in Gov. Mark Dayton’s $986 million capital investment package for the 2014 session, and District 16A Rep. Chris Swedzinski is authoring part of an amendment to the Minnesota House’s construction package that would include $1.5 million for the MERIT Center.