Referendum Q’s and A’s
Q's and A's
Q: What is the Community Recreation Initiative?
A: The Community Recreation Initiative is the idea that, as a city, we need greater access to healthy, outdoor, community-building opportunities. The component projects of the initiative include the completion of the Hermantown Connector Trail System, a reimagining of Fichtner Park, and the addition of a second sheet of indoor ice.
Q: What will the sales tax increase be if all three components of the referendum pass?
A: Whether one, two, or three of the components pass, the increase is the same; a half percent.
Q: So if one or two projects pass, does Hermantown get the full $19,000,000+ of sales tax revenue for the projects that pass?
A: No, the dollar amounts approved by the state legislature are the set amounts that can be collected, and they have to be used for that project. The percent of sales tax increase is the same, but the sales tax dollars collected are specific to each project.
Q: What are the dollar amounts for each project?
A: Specifically for the completion of the trail system, the City can collect $4,750,000 should voters approve that question on the ballot. The reimagining of Fichtner Park was approved for $3,900,000 should voters approve that question. The potential new indoor sheet of ice is allowed to collect $10,840,000 should voters approve that component. Additionally, these specific amounts are listed in the ballot questions themselves.
Q: What will the sales tax be should any of the component projects pass?
A: The sales tax in Hermantown will move to 8.875%, the same as neighboring Duluth. Depending on which project or projects are approved, that will determine how long this increase stays in action.
Q: Is the increase permanent, or does it end at a certain point?
A: The increase is NOT permanent. Changes in how local sales tax is allowed at the state level mean that this particular increase has a sunset. The timing of that sunset depends on which combination of the component projects passes. The expected length for each project if they pass individually is four years for Fichtner Park, five years for the trail system, and 11 years for the indoor sheet of ice. If all three pass, the tax is set to sunset in about 20 years.
Q: Is the referendum one question or three questions?
A: At this point, there are three separate questions on the ballot as required by recent changes to the law regarding sales tax initiatives. This can be a bit confusing because whether one, two, or three of the component projects pass, the percent increase in the local sales tax is the same, but the dollars collected depend on which components are approved by voters. Efforts were made to allow it to be a single, clearer question on the ballot, but that did not come to pass.
Q: So are the projects and questions linked, or can one or two pass if others fail?
A: One, two, or three of the projects can pass, and the percent of sales tax increase would be the same. While the projects are all related – as part of the Community Recreation Initiative – they do not have to be passed together for one or two of them to become a reality. Each question/project needs 50 percent, plus one, of the votes to move forward.
Q: How much of sales tax is actually paid by Hermantown residents?
A: More than 75% of the sales tax in Hermantown is paid by non-residents, if not more. The University of Minnesota recently completed a local sales tax study and determined that less than a quarter of all the annual sales tax revenue in Hermantown is generated by Hermantown residents.
Q: What does a half-percent sales tax increase actually mean?
A: On taxable goods in Hermantown, the sales tax rate would increase from 8.375% to 8.875%. This additional funding would be reserved for whichever of the three component projects of the Community Recreation Initiative pass. Sales tax does not apply to all items – gas, groceries, clothing, motor vehicles, and more are exempt from sales tax. A complete list of nontaxable items can be found at this link. A helpful way to think of the impact of a half percent increase is that for every $100 spent on taxable goods, an additional 50 cents will be dedicated to this increase. For every $10, it would be 5 cents, and for every dollar spent, it would be half a penny. If the proposed sales tax increase were in action in 2020, each Hermantown resident would have paid, on average, an additional $33.44 in sales tax that year.
Q: Is the University of Minnesota’s full sales tax analysis available?
A: Yes, see the City’s page dedicated to sales tax for further information and the full analysis.
Q: If one or more of the projects does not pass, will we get to vote on funding it by sales tax in future elections and years?
A: How the state legislature handles the rules governing local sales tax has changed in recent years – such as the specific questions, how the sales tax is now sunset, and the listing of the amounts in each question – so it is difficult to predict how future elected state officials will treat this funding option. Because of that fact, it is uncertain Hermantown will get another opportunity to vote on these component projects at any other time than in 2022.
Public Information Meetings
Learn More
Hermantown and NorthStar Ford Announce Arena Naming Partnership
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Election Day is Tuesday, November 8.
The final public information meeting was Wednesday, November 2, at 5 p.m. at City Hall. Additionally, city staff has held informational sessions around the community, which can be found in the schedule section below.
The fourth public information meeting, held on October 12, can be viewed below. Additionally, the third public information meeting – focusing on the possibility of another indoor sheet of ice – occurred on September 21 at 5 p.m. at City Hall. Earlier public information meetings were held, one in mid-July and one in late August, focusing on the Fichtner Park and Hermantown Connector Trail System portions of the Community Recreation Initiative. This will be followed by at least two overall informational meetings leading up to November. Questions regarding these meetings, any portion of the overall project, and the sales tax initiative can be directed to Joe Wicklund, Communications Director, at [email protected] or at 218-729-3600.
View October 12 Public Information Meeting – Community Recreation Initiative
View September 21 Public Information Meeting – Additional Indoor Ice Sheet
View August 30 Public Information Meeting – Trail System
View the Hermantown Connector Trail System Informational Video
View July 13 Public Information Meeting – Fichtner Park
View Preliminary Proposed Fichtner Park Upgrades
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September 22 – Informational table session at Hermantown High School volleyball game
September 23 – Informational table session at Hermantown High School football game
October 4 – Informational table session at Hermantown High School volleyball game
October 7 – Informational table session at Hermantown High School football game
October 12 – Public Information Meeting #4 – 5 p.m. at City Hall
October 13 – Informational Meeting with Hermantown History Center
October 13 – Informational Meeting with Edgewood Vista
October 20 – Chamber Luncheon Presentation on the Community Recreation Initiative
November 2 – Public Information Meeting #5 – 5 p.m. at City Hall
Want to have a member of city staff provide referendum information at an event or to a group? Contact Joe Wicklund, Communications Director, at [email protected] or 218-729-3614.
The Ballot Questions
Current Minnesota law regarding local option sales tax requires that all three component projects of the Community Recreation Initiative be separate on the November 8 ballot. The questions are listed below. The components are independent of each other – meaning one, two, or all three can pass. The sales tax increase will be a half percent whether one, two, or all three pass. If you would like to see these yes/no questions as part of the full November ballot, you can enter the appropriate information on the state’s website here.
Question One
Community Recreation Initiative Arena Project
Should the City of Hermantown be authorized to pay for a portion of the upgrades to the Hermantown Ice Arena with up to $10,840,000 plus allowable costs and issue bonds as part of the larger Community Recreation Initiative of up to $19,310,000 authorized by the State of Minnesota in the 2021 tax bill and paid for with a portion of the additional one-half of one percent (0.5%) local option sales and use tax?
Question Two
Community Recreation Initiative Trails Project
Should the City of Hermantown be authorized to pay for a walking, running, biking and other non-motorized trail upgrades as part of a larger effort to connect the Essentia Wellness Center, Fichtner Field Complex, Stebner Park, local schools, other communities, and other trail systems with up to $4,750,000 plus allowable costs and issue bonds as part of the larger Community Recreation Initiative of up to $19,310,000 authorized by the State of Minnesota in the 2021 tax bill and paid for with a portion of the additional one-half of one percent (0.5%) local option sales and use tax?
Question Three
Community Recreation Initiative Fichtner Park Baseball,
Basketball, Playground & Skate Project
Should the City of Hermantown be authorized to pay for baseball, sports court, playground, basketball, and skate park upgrades at Fichtner Park with up to $3,900,000 plus allowable costs and issue bonds as part of the larger Community Recreation Initiative of up to $19,310,000 authorized by the State of Minnesota in the 2021 tax bill and paid for with a portion of the additional one-half of one percent (0.5%) local option sales and use tax?
Additional Info
From local polls to governmental processes, additional information regarding the Community Recreation Initiative is found below.
Previously, the process moved forward in the summer of 2021 with the state legislature granting permission for the projects to be included on the November 2022 ballot. This step allows Hermantown residents to cast their vote for or against funding these particular projects with a half-percent sales tax increase. If you are interested in receiving communications directly from the City on the Recreation Initiative, as well as other key pieces of information, you can sign up here.
In the spring of 2021, the City requested feedback in the form of a survey. The results – both with total respondents and self-identified Hermantown residents – are available below.
Overall Survey Results – 1,056 Respondents
Hermantown Resident Survey Results – 887 Respondents
In January of both 2020 and 2021, the City Council passed similar resolutions as a step in the formal process of requesting permission from the state legislature to utilize a half percent (.5%) sales tax increase to fund the recreation initiative. That process was halted by the COVID-19 pandemic without an answer from the state legislature in 2020. A copy of the 2021 resolution can be found as part of the City Council Minutes below.
January 19, 2021 – City Council Minutes
Information related to the resolution itself, from the staff memo to the initial economic impact study of the creation of a second indoor sheet of ice, can be found in the City Council Agenda packet from that meeting.
January 19, 2021 – City Council Agenda
Arena Addition – Economic Impact Study
The League of Minnesota Cities (LMC) has provided an outline of the necessary steps cities must take in order to progress through this process. That information can be found at the following link.
There are three components to the Community Recreation Initiative – the reimagining of Fichtner Park, an addition to the hockey arena in support of increased demand for youth opportunities, and the completion of the city-wide trail system. One section of the trail system has already been completed – Boulder Trail. Completed in 2021, as part of the Section 24 Trunk Sewer Project, this trail section was funded without any property tax to residents, thanks in large part to a grant from the Greater Minnesota Regional Parks and Trails Commission.
