Project Finance
The City’s investment plan that shares the costs with residents and nonresidents.
How nonresidents will help pay for the plan
61.6%
38.4%
About 61.6 percent of the funds generated by the sales tax will come from nonresidents who make purchases in Golden Valley.
That means nonresident spending in the city will contribute approximately $64.7 million for the $105 million in projects, according to the University of Minnesota.
Why a local sales tax?
The City Council chose a local sales tax over a property tax increase to spread the cost of the projects among residents and nonresidents who benefit from Golden Valley’s public services.
With the high traffic of nonresidents who work in Golden Valley (approximately 33,200) combined with the population of Golden Valley (approximately 22,000) who use City services, the sales tax meets the Minnesota Legislature’s goals for regional impact.
If the projects were funded through a property tax increase, the cost burden would only fall on those who own properties in Golden Valley.
The local sales tax can’t be extended or used on other projects without authorization from the State Legislature and another vote of approval by residents.
The sales tax is not permanent. The tax will be in place for the next 30 years or until the bonds are repaid, whichever comes first.
Collections from the tax will be used to make bond payments to finance the City’s investments. This approach allows current residents to take advantage of the improvements several years sooner while the bonds are being repaid.
The University of Minnesota analyzed the economic effects of a local sales tax increase in several Minnesota cities and found no evidence that overall sales growth for businesses was impacted.