Local Representative Concerned About Sales Tax Expansion

Local Representative Concerned About Sales Tax Expansion Click to Enlarge Photo:

Jan 23, 2013 at 10:50 am

ST. CLOUD, Minn. (KNSI) "More questions than answers" - that's the response to Governor Dayton's budget proposal from District 13B House Representative Tim O'Driscoll of Sartell.

The governor delivered his budget proposal to legislators yesterday, a plan that includes lowering the state sales tax to 5.5 percent while increasing the amount of goods and services that can be taxed.

Republican O'Driscoll tells KNSI he's concerned the change will have a larger than expected impact not just on middle earners, but also small cities that pay for services like engineering, legal representation and routine auditing.

O'Driscoll says larger cities like St. Cloud have staff on the payroll to provide these services, but cities like Sauk Rapids and Sartell have to contract for them. He's not sure yet if those services will undergo taxation, but if they do, O'Driscoll says the impact on smaller city budgets could be difficult.

"If this broadening of services [to be taxed] includes cities and counties, could the hundreds of thousands of dollars these cities spend on sewer and water, or auditing, or legal services, be subjected to tax?" O'Driscoll wonders. "Larger cities may not be affected by this, but small cities like Sauk Rapids could all of a sudden have a huge tax increase imposed on them by the state."

O'Driscoll says budget talks won't see much closure until May. He stressed that despite the fact that the House and Senate are now under Democratic leadership, much negotiation in on tap, and nothing in the proposal is a done deal.

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