Democrats in the Minnesota House are reducing the state’s overall commitment to a plan to help Mayo Clinic expand in Rochester. In turn, Rochester and Olmsted County are being asked to kick in much more than they have already committed.
Rochester is being asked to raise $128 million in local taxes for the project. The proposal would also allow Olmsted County to authorize new local taxes for a $119 million transit line.
The Mayo plan, which is included in the House Tax bill, lowers the overall state expense to $338 million over the next twenty years. That’s roughly $200 million less than Mayo’s request. Rep. Kim Norton, R-Rochester, says she’s hoping the Mayo Clinic and elected officials in Rochester and Olmsted County will support the proposal.
“Some of it’s going to be a challenge but the Tax Chair was really clear that the locals are going to have more skin in the game,” Norton said. “It’s not free money.”
The latest development comes less than a week after Mayo Clinic officials agreed to drop their push to capture a portion of future sales, income, property and corporate taxes. The state funding would help Rochester build roads, bridges, parking lots and other amenities like entertainment centers and parks.
House Taxes Committee Chair Ann Lenczewski, DFL-Bloomington, said the state would cap annual state payments to Rochester at $30 million. She says the state money will only kick in after the Mayo Clinic spends at least $200 million in Rochester.
“If it’s worth having it’s worth paying for,” Lenczewski said. “We want to have the mechanism that makes everything get paid for. If legislators around the state say, ‘It’s not worth it to me,’ then they’re going to vote no and it’s not going to pass.”
Lenczewski said she is giving Rochester a menu of local taxes to choose from to pay the local costs. They include a tax abatement extension, an extension or increase of the local sales tax, a food and beverage tax, a lodging tax and an entertainment and recreation tax. She says Olmsted County also would have the authority to raise a local option sales tax and a wheelage tax to pay for the proposed transit line.
The measure will be included in the House and Senate Tax plans. Rep. Greg Davids, R-Preston, said he’d like to see the Mayo plan move as a standalone bill. Davids, who is a co-author of the bill, said he won’t support a proposal that increases income, alcohol and cigarette taxes. Davids also said he was concerned about the impact that higher local taxes would have on Rochester and Olmsted County.
“I don’t want to put them in such a position that they are not able to deliver,” Davids said. “Hopefully we can work that number back for the city and the county.”
The House plan will have to be reconciled with a Senate proposal. Senate Democrats are still working on their plan. A hearing on the bill was canceled last Friday. Senate Tax Chair Rod Skoe says he was still working on parts of the bill and decided to delay the hearing. Skoe says he’ll release the Senate’s omnibus tax bill next week.