By Rich Larson, KYMN News
The Northfield City Council took a significant step Tuesday night toward diversifying city revenue by discussing the implementation of a local option sales tax. The proposal, which would require legislative approval and a public vote, could generate an estimated $11.4 million over 20 years for critical capital improvement projects.
City Administrator Ben Martig explained that, after a two-year moratorium expired in 2025, Minnesota law now allows cities to seek legislative authorization for a local use sales tax on taxable goods and services, with a large amount of the tax collected coming from outside the City of Northfield.
“This is an alternative revenue source for which cities have the authority to request legislative approval. If that goes through, it will then require a council re-approval, and then voter approval at the city level. It would be an additional sales tax on top of the existing sales taxes only for the same things that are taxable in the state of Minnesota at a rate of 0.5%. About 40% of the revenue generated would be coming from non-Northfield residents.”
The council reviewed potential projects already listed in the city’s capital improvement plan. These include major repairs at the Northfield Public Library, such as exterior erosion control and stairway replacement, and upgrades to the Northfield Community Resource Center (NCRC), including HVAC and flooring improvements. Other possibilities include Riverside Park enhancements, public restrooms, and a Third Street parking structure.
Mayor Erica Zweifel emphasized the strategic importance of the proposal.
“This is a tremendous opportunity to decrease the tax burden. We’re really focused on the, it’s a strategic plan item for us to increase and diversify our revenue sources. And so this in particular, we look at items that are already on the capital improvement plan that we’ve already been discussing. And then by using the local option sales tax, we’re essentially reducing the tax burden on those items about 40%.”
Should the council approve a resolution by the end of January, the request will move to the state legislature. Upon legislative approval, the measure would return to the council and then appear on the November general election ballot for voter consideration. Martig noted that the process includes multiple checkpoints and opportunities for public input.
Mayor Zweifel said council members expressed strong interest in pursuing the option, with discussions centering on project priorities and community engagement. One recurring theme was the need for public restrooms, which could be incorporated into several proposed projects.
She said this project is about making Northfield a better place for residents and visitors, and that the city will go to the public for feedback on the idea.
“No one (on the Council) wanted to get too specific about things because we also want to hear from the public and listen. It doesn’t make any sense to bring something to the voters that they’re not interested in having a local option sales tax for.”
The council will hold a work session next week. A formal vote is expected at the regular meeting on January 20th to determine whether to advance the proposal to the legislature.
