Detroit Lakes considers taxing food, beverages

Talk about it

Legislation has passed that allows Detroit Lakes to go to the voters for a Food and Beverage Tax.

The city has two years to hold an election to vote on the issue, and a tax of up to one percent can be imposed. The beverage portion includes on-sale intoxicating liquor and fermented malt beverages, so it would mean basically any eating or drinking establishment in town.

The city had previously discussed setting the increase at a half percent, which would raise about $110,000 a year. The state has approved up to 1 percent, though. The city council still needs to discuss if it will ask voters for the one-half percent or 1 percent.

“The main point is the money can’t go for general operations,” City Administrator Bob Louiseau said.

When the city approached the state to authorize the vote, it had to determine what the proceeds from the increased tax would go toward.

Outlined were “control flowering rush infestation, construction and improvement of bike trail facilities, parking improvements near public facilities and redevelopment of the area returned to the city as a result of realignment of Highway 10.”

Louiseau said that although the city doesn’t know the exact wording on the ballot, those four items will be listed on the ballot so voters know what they are approving.

The referendum would then expire when the city council decides enough money has been raised for those projects.

“This is only good until those projects listed are completed,” he said. “

For instance, if bonds were sold to complete a project, the city could collect the Food and Beverage tax until those bonds were paid off. But, the first one on the list is flowering rush, and will that ever end?

“The main thing we were looking at is getting a program so it was under control,” Louiseau said of the flowering rush. “So at that point, I think, the council would look at how much money this is really going to take to sustain it once we get the initial work completed.”

As for when the vote will be, that’s up for discussion yet. Mayor Matt Brenk has set a special meeting for June 22 to discuss the sales tax.

“The council needs to make a decision and then we need, I believe, it’s 64-65 days to notify the county in advance so they can make the proper arrangements,” Louiseau said.

There were a few other cities with tax approvals including Rochester’s lodging, Marshall for the Minnesota Emergency Response and Industry Training Center bonds and Giants Ridge Recreation Center.

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