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Local Sales Tax
Both City Questions Approved on November 5, 2024
Thank you to all Oakdale residents who voted and made their voice heard on this important community decision!
Question 1 was approved with 68% of the vote. (Sales tax extension for expansion and remodel of the Police facility.)
- YES 9,919
- NO 4,631
Question 2 was approved with 71% of the vote. (Sales tax extension for the construction of the new Public Works facility.)
- YES 10,319
- NO 4,163
Summary (Prior to Election Day)
The City of Oakdale will have two questions on the November 5, 2024 general election ballot related to the extension of the local sales tax to help remodel and expand the current Police facility and fund a new Public Works facility. This page will provide resources for voters about the local sales tax.
Quick Facts
- If both questions are approved, the 0.5% local sales tax rate will not change, but the sunset date will change from 2048 to 2053 to raise an additional $9 million.
- Approximately 50% of the local sales tax collected in Oakdale comes from people outside of Oakdale who shop in our community.
- The local sales tax mirrors the state sales tax, meaning it does not apply to specific purchases like groceries, clothing and medications.
Background
In 2022, Oakdale voters approved a half-percent (0.5%) local sales tax to fund $15 million for the expansion and remodel of the current Police facility and $22 million for a new Public Works facility. The sales tax was implemented on April 1, 2023 and is currently slated to remain in place until 2048 or until the funds have been collected, whichever is sooner.
Since these construction projects were proposed back in 2021, construction costs have risen significantly due to inflation.
In 2023, the City asked the Minnesota Legislature for the authority to go back to voters with ballot questions to extend the collection of sales tax to close the funding gap caused by inflation, which the Legislature approved.
The increased costs due to inflation total $9 million more than the original cost estimate and amount approved by voters in 2022. If both questions are approved, the total funds raised would increase from $37 million to $46 million. The extension, if approved, would allow the City to collect the 0.5% sales tax for an additional five years, which would extend the sales tax through 2053.
| $ Approved by Voters in 2022 | $ Increase Requested of Voters in 2024 | $ Total if Approved by Voters in 2024 | |
|---|---|---|---|
| Police Facility | $15 million | $3 million | $18 million |
| Public Works Facility | $22 million | $6 million | $28 million |
| Total Cost of Projects | $37 million | $9 million | $46 million |
Ballot Questions
Below voters will find the language as it will appear on the November 5 ballot for each of the two questions regarding the local sales tax.
Question 1: Extend Police Facility Expansion Sales Tax Without Rate Increase
Shall the City of Oakdale be authorized to extend the existing sales and use tax for inflationary costs of expanding and remodeling the Police Department Facility for an additional period of 5 years from 2048 to 2053 or until an additional $3 million plus the costs of collecting and administering the tax and the costs of issuing bonds including interest is collected? If this question is approved, the rate of the sales tax will remain unchanged at 0.5% and will remain in place until 2053 or until enough sales tax revenue has been collected to pay for the costs of the project, administration, and financing.
Question 2: Extend New Public Works Facility Sales Tax Without Rate Increase
Shall the City of Oakdale be authorized to extend the existing sales and use tax for inflationary costs of constructing a new Public Works Facility for an additional period of 5 years from 2048 to 2053 or until an additional $6 million plus the costs of collecting and administering the tax and the costs of issuing bonds including interest is collected? If this question is approved, the rate of the sales tax will remain unchanged at 0.5% and will remain in place until 2053 or until enough sales tax revenue has been collected to pay for the costs of the project, administration, and financing.
- What is a local sales tax and what can it be used for?
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A local sales tax is collected within the geographic boundaries of a city or county. The local sales tax applies to the same items and services as the general state sales tax. Items exempt from regular state sales tax are also exempt from the local sales tax including many essential items such as groceries, prescription and over-the-counter medications, baby products and clothing.
Local governments in Minnesota use the local sales tax to fund capital projects such as public buildings, libraries, parks, and other amenities.
Complete list of non-taxable items from Minnesota Department of Revenue
- Why is the City proposing an extension of the local sales tax?
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Construction costs have risen significantly due to inflation since the approved Police and Public Works facility projects were first proposed. If approved by voters, the extension would allow the City to collect funds to cover the projects’ funding gaps caused by inflation.
- If the extension is approved, how much would the local sales tax be and how long would it be in effect?
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The local sales tax rate would remain 0.5%, or $.50 on every $100 of taxable purchases. The period to collect the approved funds would extend an additional five years, a total of 30 years, to collect funds for the approved projects. The tax would remain in place until 2053 instead of 2048, or until funds are raised, whichever is sooner.
- What is the additional amount of money that would be collected, if the extension is approved? What will the new total funds collected be with the extension?
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The additional funds that would be collected total $9 million – $3 million for the Police facility project and $6 million for the Public Works facility project. The total amount of funds to be collected would total $46 million – $18 million for the Police facility project and $28 million for the Public Works facility project.
- Will the City be able to use the additional funds collected for other projects?
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No. Any additional funds collected through the local sales tax would only be used to cover inflationary costs of the projects approved to be funded by the sales tax in 2022. These projects include a remodel and expansion of the current Police facility and a new Public Works facility.
- Did the City Council approve asking voters for an extension of the local sales tax?
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Yes, on July 25, 2023, the City Council voted unanimously to approve a resolution allowing the City to increase the amount and duration of the approved local sales tax. On August 14, 2024, the City Council approved unanimously the local sales tax questions to present voters on the November 5, 2024 ballot.
- Why is the City able to go back to voters to ask for an extension?
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In 2023, the Minnesota Legislature reviewed Oakdale’s request and granted the City authority to request additional funds for increased costs through 2023 Minnesota Laws Chapter 64, Article 10, Sections 20-24.
- Why can’t the City make cuts to save money on the projects?
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City staff, the City Council, and the project design teams have made numerous cost-saving adjustments to the projects. Further changes would impact the functionality and efficiency of the projects, such as eliminating an on-site fuel island at the Public Works facility, which is used daily by Police, Fire and other City employees for City work.
- What will the local sales tax questions look like on my ballot?
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Voters will have two questions to respond either YES or NO to for the local sales tax. The ballot language is as follows for both questions:
Question 1: Extend Police Facility Expansion Sales Tax Without Rate Increase
Shall the City of Oakdale be authorized to extend the existing sales and use tax for inflationary costs of expanding and remodeling the Police Department Facility for an additional period of 5 years from 2048 to 2053 or until an additional $3 million plus the costs of collecting and administering the tax and the costs of issuing bonds including interest is collected? If this question is approved, the rate of the voter-approved sales tax will remain unchanged at 0.5% and will remain in place until 2053 or until enough sales tax revenue has been collected to pay for the costs of the project, administration, and financing.Question 2: Extend New Public Works Facility Sales Tax Without Rate Increase
Shall the City of Oakdale be authorized to extend the existing sales and use tax for inflationary costs of constructing a new Public Works Facility for an additional period of 5 years from 2048 to 2053 or until an additional $6 million plus the costs of collecting and administering the tax and the costs of issuing bonds including interest is collected? If this question is approved, the rate of the voter-approved sales tax will remain unchanged at 0.5% and will remain in place until 2053 or until enough sales tax revenue has been collected to pay for the costs of the project, administration, and financing. - What happens if the local sales tax extension is not approved by voters?
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The City would have to look to other funding sources to fill the funding gap, including but not limited to property tax increases. Approval of the local sales tax extension would mean approximately 50% of the funds raised will come from people outside of Oakdale who shop in our community.
- Why is the current sales tax for the City of Oakdale higher than what was indicated in 2022?
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When voters approved the local sales tax in 2022, the increase of 0.5% brought the total sales tax for Oakdale to 7.875 %. However, on October 1, 2023, the State of Minnesota increased the state sales tax by 1% (0.75% for transportation and 0.25% for housing). The current sales tax rate for Oakdale is now 8.875%. The sales tax rate will remain 8.875% if the extension is approved.
The current breakdown of the Oakdale sales tax is:
- 6.6875% – State Tax
- 0.75% – Metro Area Transportation Tax
- 0.5% – Washington County Transit Tax
- 0.5% – City of Oakdale Tax
- 0.25% – Metro Area Tax for Housing