What You Need to Know About the New Taxes in Mankato

Mankato citizens should understand some of the recent developments in the area’s tax laws. Voters in Mankato and North Mankato recently voted in a referendum to approve certain sales tax extensions. While sales taxes will rise due to the referendum’s result, voters overwhelmingly supported this decision because the additional taxes will go to improving the infrastructure and amenities in the area. The biggest benefits of this tax increase involve improvements and operating flexibility for Caswell Park.

Funding Caswell Park

A seemingly small .5% increase in sales taxes project to $47 million in increased tax revenue for Mankato and $15 million in increased revenue over the next two decades for the city of North Mankato. Citizens of North Mankato are especially open to using this tax revenue for operating costs at Caswell Park, the local outdoor sports complex that has struggled to meet its operating requirements in recent years. In 2015, Caswell Park attracted more than 66,000 people who spent roughly $7.5 million on beer and concessions at the sports center, as well as at local businesses such as hotels, shopping, groceries, restaurants, and gas stations.

Despite these seemingly high revenue numbers, the city of North Mankato had to offset Caswell Park’s 2016 operating losses by $93,000, a dramatic increase from about $49,000 the previous year. City officials have started to sell advertising space at Caswell to increase revenue, but the ultimate goal is for Caswell Park to be completely self-sufficient. The planned improvements, which include a sports dome to allow for play during winter months, will hopefully draw enough business to boost Caswell’s operating efficiency very soon.

Other Uses for New Tax Revenue

In addition to the improvements planned for Caswell Park, the additional revenue from this sales tax increase will also fund flood mitigation and various infrastructure and transportation projects in the area. The city of North Mankato is also considering a riverfront housing development and an expansion for Taylor Library.

Business Owners’ Concerns

All of these plans for the additional tax revenue come at a cost. While the .5% sales tax increase seems innocuous, it does present several issues to local business owners and customers. Some business owners are concerned that the additional tax will lead to higher prices and/or lower profit margins, which are already slim in the area. However, more tourism, new businesses, and more attractions and amenities in the area could easily offset this concern. The referendum proved that although some Mankato locals are concerned about price hikes and operating costs, they are generally optimistic that this sales tax increase will eventually work to their benefit.

Past Roadblocks

Last year, Senate Democrats and House Republicans could not reach an agreement with tax legislation, causing an impasse that prevented a proposed 2017 tax bill from becoming law. During the last weekend of the 2016 session, the two sides finally reached an agreement on tax legislation, but Governor Mark Dayton refused to sign the bill into law. State officials discovered that certain language errors in the bill’s text would have cost the state of Minnesota more than $100 million. Some lawmakers are now unsure about whether or not this year’s Republican-controlled legislature will clash with Governor Dayton due to hundreds of millions of dollars’ worth of proposed tax cuts.

Ultimately, tax hikes carry a negative connotation, but when new tax laws are appropriately worded and officials make their intentions for the additional revenue clear to voters, the public generally views improving the community as an acceptable reason to pay more taxes. Business owners may struggle with slightly slimmer profit margins for some time, but hopefully the improvements planned for Mankato and North Mankato will increase spending in the area and bolster the local economy.