WILLMAR -- The city of Willmar has collected $101,000 in local option sales tax revenue since the voter-approved tax went into effect on Jan. 1.
The half-percent tax raised $90,000 from retail sales for the month of January, and the $20 excise tax on new car sales raised $11,000 in January and February. The excise tax takes the place of the sales tax on vehicle sales.
A report on sales tax revenue was presented Monday evening to the City Council's Finance Committee by Steve Okins, finance director. "We just intend to give the committee monthly updates so that they can see where we're at in the process,'' he said.
The sales tax was endorsed by Willmar voters in 2004 and was approved by the Minnesota Legislature in 2005.
During the next seven years, the city hopes to raise $8 million, of which $7 million will be spent to redevelop the old airport into an industrial park after the new airport opens this year.
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Of the remainder, $400,000 will be spent on biking and hiking paths, $300,000 to connect the Civic Center and the Blue Line Center, and $300,000 to buy 60 acres of land on U.S. Highway 71 north of Willmar.
Revenue raised during the first year of the tax will be used on the bike paths, Civic Center connection and land purchase. The remainder will be spent on the industrial park.
The city is anticipating $1.5 million in collections for the first year, but Okins said it's too early to tell if collections are on track with the budget.
"January-February-March are usually slow months anyway as far as sales tax receipts,'' he said. "You'll see April-May-June pick up.''
In an update on the projects, Okins said discussions with an architect are taking place for the Civic Center-Blue Line connection.
He said the Community Education and Recreation Department is working with the Public Works Department to use sales tax revenue as the local match for government trail grants. City Administrator Michael Schmit said sales tax revenue can be used to obtain other grants.
"There are a number of grants that are available to assist communities with hiking and biking trails, and most of them require local matches,'' said Schmit. "So we're going to put our hat in the ring for some of those dollars and do more trails.''
This is the city's second experience with a half-percent sales tax. The first was in effect from 1998 through 2001 to finance expansion and remodeling of the Willmar Public Library. The tax was ended four years early after generating $4.5 million for the project.
