Excelsior Considers Sales Tax on Food, Drinks to Pay for Park Improvements

Updated: 03/07/2014 5:14 PM KSTP.com By: Beth McDonough

The west metro town of Excelsior says it needs millions of dollars to renovate a popular park. Its solution: a tax aimed not only at visitors but people who live there.

Even though the huge park along Lake Minnetonka is covered with snow, a closer look reveals the band shell, the bathrooms and port are showing years’ worth of wear and tear.

"It desperately needs improvements," said Excelsior Mayor Mark Gaylord. He says a major makeover to the tune of $5 million is needed. 

Although the park sits along the shoreline in Excelsior, Gaylord points out folks from all over the metro spend time there, especially during the summer. The town is looking to cash-in on the tourists by proposing a new tax to pay for planned park improvements like new beaches, boardwalk and picnic area. 

The sales tax would be on food and drinks at the 17 restaurants in town and not on food from the grocery store.

"Nobody wants a tax and I don't blame them, but we're running out of options to pay for this and we really don't want the residents to pay for all the improvements, it just doesn't seem fair," Gaylord said.

Here's the plan:  the 1-percent tax would be temporary, helping to raise about $200,000 a year, over 25 years. Once $5 million is collected the tax would end.

"For a specified amount of time it's a good thing because the commons do need help," Lorraine Scott said.

The mayor believes turning to visitors makes sense because the town doesn't receive any local government aid. Plus it’s so small, less than one-square mile with only 2,100 residents, the tax base is limited. 

Despite that, not everyone is onboard.

"We're taxed to death, taxes, taxes, taxes, I love Excelsior, I love Excelsior Beach, but the thought of adding more taxes is too much," said Judy Dixon-McGuire, a visitor.

Gaylord says on a $100 restaurant bill, the tax would be minor, $1. "We think it's fair to share the costs and improvements with everyone," said Gaylord.

The referendum will be on the November ballot.  If passed, Excelsior would become the seventh city in Minnesota with a special food tax. The others are Detroit Lakes, Duluth, Little Falls, Mankato, Minneapolis and St. Cloud.

State Sen. David Osmek is sponsoring a bonding bill that includes money to help pay for the makeover. Gaylord tells KSTP if passed by legislators, that's the best way to go because it doesn't affect businesses, visitors or residents with a tax.