Purpose

• This bill changes how Baxter may use the revenue from its local sales tax. It broadens where and how the money can be spent, and it adds new funding options, all subject to voter approval.

Main Provisions

• Use of revenues (Subd. 3(a)): Revenues from the local sales tax must be used to pay the cost of collecting and administering the tax, and to finance the acquisition and betterment of water and wastewater facilities to serve the cities of Brainerd and Baxter. It also allows funding to build and equip a fire substation, as approved by voters in a referendum. Authorized costs include property acquisition and construction/engineering costs related to these projects.
• Additional capital infrastructure funding (Subd. 3(b)): Baxter may, if approved by voters, allocate up to an additional $40,000,000 of the tax revenues to a capital infrastructure fund. Money in this fund may be used for:
  • Sanitary sewer, storm sewer, and water projects
  • Transportation safety improvements
  • Improvements to the Brainerd Lakes Area Airport
• Optional expansion with debt and broader projects (Subd. 3(c)): If approved by voters (as required by state law), Baxter may allocate the revenues to pay for city projects, including the costs of collecting and administering the tax and debt service on bonds issued to finance projects. Specific authorizations include:
  • Up to $50,000,000 for upgrades and improvements to water and wastewater utility systems
  • Up to $16,000,000 for improvements to street infrastructure and safety improvements to streets affected by regional Highways 371 and 210
  • Up to $10,000,000 for construction of a new public safety facility

Significant Changes to Existing Law

• Expands the uses of Baxter’s local sales tax revenues beyond previously allowed projects, including broader wastewater and water system improvements, street infrastructure, airport enhancements, and a new public safety facility.
• Creates and funds a capital infrastructure fund with a substantial new appropriation ceiling ($40,000,000), subject to voter approval.
• Allows Baxter to finance these projects through bonds and to cover the debt service for those bonds, with authority to use tax revenues for debt service in addition to project costs.
• Reinforces that these expansions require voter approval and are implemented under the authority of existing state law, with a specific “notwithstanding” clause to override certain limitations in the cited statutes.

Financial and Governance Implications

• The bill increases Baxter’s flexibility to fund major infrastructure and public safety projects using local sales tax revenues.
• It ties funding decisions to voter referendums, ensuring taxpayer input for large allocations.
• It introduces or expands debt financing (bond issuing) for approved projects, with revenues able to cover debt service as part of the funding plan.

Relevant Terms - local sales tax - revenues - Baxter - Brainerd - water and wastewater facilities - fire substation - referendum / voters - capital infrastructure fund - sanitary sewer - storm sewer - water projects - transportation safety improvements - Brainerd Lakes Area Airport - debt service - bonds - property acquisition - upgrades and improvements to the water and wastewater utility systems - street infrastructure - regional Highways 371 and 210 - construction of a new public safety facility