The Cost
The cost and tax impact
This November, Brooklyn Center residents will consider a half-percent local sales tax to help fund the “Our Center Our Future” plan to expand and enhance the City’s community center.
The Minnesota Legislature authorized the City to seek voter approval to use a local half-percent sales tax to collect up to $44 million to help pay for the plan. The legislature also contributed $5.1 million in state bonds to support the project.
If approved by voters, the City would use collections from the local sales tax to make bond payments to finance the project.
Cost and funding sources
Core plan ($37.5 million): This investment includes new courts for pickleball, volleyball and basketball, an indoor walking and jogging track, an indoor playground for children, designated areas for teenagers, updated bathrooms and locker rooms and numerous repairs and infrastructure upgrades.
The core plan would be funded through two sources:
Local half-percent sales tax: If approved in November, the local half-percent sales tax would be used to collect $32.4 million, plus interest and bond issuance costs, spread over a 20-year period.
State bonding funds: The Minnesota Legislature approved $5.1 million in bonding funds to assist with pre-design and construction costs for the project. These funds require a 1-to-1 match to be utilized. Collections from the local sales tax, if approved, would qualify as the match.
Enhancements ($11.6 million): The City will continue to use collections from the sales tax, up to the total authorized by the Legislature, and other funding sources to upgrade and repair other parts of the building, including the swimming pool area, fitness room and the roof.
Why a local sales tax?
The City Council concluded that a half-percent local sales tax was the best funding option because it spreads the project’s costs among residents and nonresidents who make purchases in the city and utilize local amenities such as the community center. If the project was funded by a property tax increase, the cost burden would fall solely on Brooklyn Center residents who own or rent their housing and those who own commercial property in the city.
If the local half-percent sales tax is approved, each Brooklyn Center resident would pay an additional $3.14 per month on average, or $37.68 per year, in sales tax contributions, according to a University of Minnesota study.
In contrast, a property tax increase to pay for just the core plan portion would be $17.70 per month, or $212.50 per year, for an average value home of $264,800.
Nonresidents would pay 41% of sales taxes collected in the city while residents would pay 59%, according to a study by the University of Minnesota Extension Center.
In fact, almost half of the core plan, $18.4 million, would be provided by state bond funding (that has already been approved) and nonresidents who would pay the local sales tax.
How would the local half-percent sales tax work?
If approved by voters this November, the local sales tax would add one cent for every two dollars spent in Brooklyn Center, or five cents for every $10 purchase. This local sales tax is not permanent and would expire after a 20-year period or when the bonds to finance the project are repaid, whichever comes first.
Funds from the local sales tax cannot be used for other projects, just the community center.
A local half-percent sales tax is applied the same way as the state sales tax. Many essential goods are exempt, including the purchase of groceries, clothing, prescription and over-the-counter drugs, feminine hygiene products and baby products.
For more information, view this list of most nontaxable items from the Minnesota Department of Revenue.
Residents get the final say on whether to use a sales tax to support the project.
Did you know?
More than 45 cities and counties have turned to a local sales tax since 2013 to pay for a wide range of major public projects. Several Twin Cities area communities collect a local sales tax, including Maple Grove, Bloomington, St. Peter, Golden Valley, Edina and St. Paul.