10/02/2026
We discussed a city sales tax at our last meeting on October 5th. I wanted to share my thoughts, although as usual they are a bit wordy!
A council member is concerned (correctly) that the city will not be able to keep up with demand for services, especially parks, with our current funding levels. This could be addressed with a local option sales tax (LOST) of around 0.5 percent. A referendum would be required and the legislature would have to authorize the effort first. The idea here is that people from outside Shoreview pay roughly half the sales tax in the city, so we might capture funds from them instead of just city residents. The legislature would require that the city identify projects that would benefit the region and not just the city. Staff believes that our backlog of parks projects would qualify and gave us a list of needs.
The proposed City Council meeting minutes for October 5, 2026 contain the following summary of my comments. We were being asked if we wanted to authorize staff to develop a proposal to go to the legislature, which would need to be in their hands by the end of this year. The alternative would be to wait a year since a referendum would not be until 2028.
My basic interest is that we need to have a comprehensive view of our entire parks budget when we do bi-annual work planning in the spring of 2027, and then we can decide. We also will have two new council members next year and they deserve a seat at the table on this discussion from the ground floor. So I asked that we wait. Please reach out to me if you have any questions or comments.
"Councilmember Gardner said he is reluctant to support a sales tax because the quality of life survey shows two declining indicators— cost of housing and the cost of living. A sales tax would be close to 10% if adopted. From a practical standpoint, he would not want to see this in the 2027 legislative session.
"First, because it is a tremendous amount of work, and there could not be a referendum until 2028 anyway. It is possible that after the election, there may be the same committee chair in the House who does not want any of this passed. That would mean a lot of time and effort on the part of City Manager Martens between November and March would be wasted.
"Secondly, as a first-term councilmember, he had to vote on things that had started before he was elected. The previous council had decided certain things, and his vote was on the last phase. There will be two new members next year, and it would be a courtesy to them to allow them to be in on this action on the ground floor.
"He would like to initiate a strategic plan that lays everything out on the table and shows how items are paid for, whether they can be paid for with the current levy, what has to be dropped if the levy is not raised, and what items do not yet have funding. That gives the council the information to say, strategically, what is important.
"In 2028, there needs to be a two-pronged strategy because if a sales tax is put on a referendum, the truth and taxation hearing will be after the election, when an adjustment can be made for the $800,000 in sales tax if it passes. It is premature for the council to commit to this process. When it comes to the list of projects, he does not know their timeline at the current levy and rate of inflation. He does not know what the debt situation will be, as the city has taken on a lot with the new fire station, and the city’s ability to bond for more is lower at the moment before more things are paid off. He would like to know the schedule to get these things done with the current levy and what things could only be done with the additional sales tax.
"Also, the report [from the University of MN that determines who pays sales taxes in Shoreview] does not take into account the additional 10% to 15% in online sales that would be paid by city residents. He would suggest a delay to the next council to decide if they want to take that leap, and he wants to keep City Manager Martens from too much work pressure. He would also like to see some public engagement to check public response."..
"Gardner said that as part of the budget planning process in the next six months, he would like to see the whole picture simultaneously. This would not go on the ballot until 2028. Doan asked if the referendum could be in 2027. Eisenbeisz said the city would have to call a special election for 2027. There would be a better response at a general election, the next one being in 2028.
"Gardner said that telling people what could happen or not regarding implementing a sales tax can be identified more clearly as a strategic choice next year. Time is tight now, and the legislature will be doing two-year budgets. He would like more room for the next council to put all the pieces together, including the city’s debt situation and whether public safety costs level off, so the council can think long term."..
"Gardner thanked Councilmember Doan for pushing the discussion to give thought to bigger issues that will need lengthy and deep discussions."
