Voters to determine which tax dollars will pay off new Public Safety Center

Should the Rice County Public Safety Center be funded with sales tax or property tax?

That’s the decision the Board of Commissioners officially are putting to Rice County voters this November, following a brief discussion and vote at Tuesday morning’s board meeting. While commissioners shared concern about voter expectations should they approve the 0.375% sales tax (3/8 of a cent per dollar), they ultimately decided the decision was best made democratically.

The Public Safety Center is the 76-bed jailhouse and future Rice County Sheriff’s Office in northeast Faribault, and is expected to begin operations in the fall. It is the single largest investment in the county’s 171-year history, totaling around $81 million, about $5 million of which has already been accounted for with this year’s property taxes.

Steve Underdahl was the first commissioner to raise his concern that voters might think they’re essentially voting to lower property taxes, but regular budgetary increases are likely going to outweigh any savings achieved.

“I do have a concern that I think there’s going to be a lot of people who will feel that, by going to the sales tax, their property taxes are going to be reduced,” Commissioner Steve Underdahl said. “That’s not the message I’m going to tell any constituents out there.”

With annual raises for hundreds of county staffers and general inflation for goods and services, the county budget is expected to go up year after year. While this would lower the amount needed to repay the project bonds and interest, property taxes would likely still go up to cover regular increases.

“Because you vote yes doesn’t mean your property taxes are going to go down, and we would not want to deceive people of that,” Commissioner Jeff Docken said. “Some people are going to be better off, or it’s going to cost them less, one way. And some people, it’s going to cost them less another way, right? So I think [it’s best] to let the voters make that choice. And yes, education is going to be a very important part of it.”

Some confusion about whether the sales tax was legal, but was quickly resolved by Rice County Chief Financial Officer Paula O’Connell, who explained the process up to this point.

In short, a lot of communities, including Rice County, wanted to implement a Local Option Sales Tax to pay for various projects around the state. The Legislature had to approve them all, which took a few years.

Ultimately, during the 2022-23 Legislative Session, the Legislature approved the requests and placed a moratorium on any additional requests. The moratorium is another story.

The key takeaway is that Rice County was permitted to move forward with a sales tax, though it still needed to be approved by the voters in a general election.

Since the Legislature dragged its feet, the county wasn’t able to put the question on the ballot during the midterms. The next general election was the 2024 presidential election, which is coming up November 5.

After the board’s approval Tuesday, voters will decide whether to approve the sales tax.

If they don’t approve the sales tax, the cost will remain on property taxes. For a $250,000 home, property taxes increased about $45 this year, about a third of which was for the debt. For a $2.5-million property zoned as agricultural, taxes increased about $1,200.

If the voters approve the referendum, anyone who shops in Rice County would contribute to the repayment for 30 years or until the $77 million is paid off. The tax would not apply to essentials like groceries and medicine.