A half-cent here, a half-cent there

It's the little funding engine that could:

The Metropolitan Council is rapidly running out of options to come up with $135 million needed to lock in critical federal funding for Southwest light-rail transit. GOP House Speaker Kurt Daudt’s refusal to put state dollars toward the project has left few viable alternatives with only four days left in the session.

Gov. Mark Dayton, DFL legislators, local mayors and business groups are making a last-ditch effort to raise a half-cent sales tax in the seven-county metro region to expand a transit system that must accommodate 750,000 new residents who are expected here in 25 years.

“We think this is a long-term, sustainable solution,” said Adam Duininck, chairman of the Metropolitan Council, which manages the transit system used by about 275,000 people in the region on the average weekday.

Will a train that runs from downtown Minneapolis to Eden Prairie help the traffic in Forest Lake? What's in it for Hastings? How do you like your rail, St. Michael? The Met Council thinks you should pay for it, even if you never use it.

But it's only a half-cent. You won't even notice. And that's the point. You should notice the impact of taxes. After a while, it does become noticeable. Back to the linked Star Tribune article:

If the increase is approved, the Minneapolis sales tax would rise to 8.275 percent, with rates well above 10 percent for liquor, hotels, restaurants and entertainment.

St. Paul’s sales tax would also go north of 8 percent.

Is that a competitive disadvantage for those cities? Yes, eventually it is. An example -- if I want to buy something at Home Depot, I have two locations that are nearby. The closest location is in Northeast Minneapolis, while there's another one in Fridley that is a few miles further away. Currently, the sales tax rate in Fridley is 7.125%. It's 7.775% in Nordeast. If I'm buying something inexpensive, it doesn't make a lot of difference. If I'm buying new carpeting, or building materials for a remodel project, it starts to add up. And if the Minneapolis City Council decides they'd like a sales tax hike to fund some other scheme, the Nordeast location faces even a greater challenge. And since it's highly likely that a Minneapolis business faces larger costs in other ways, especially if the Minneapolis City Council jacks up the minimum wage to $15 an hour, it's increasingly difficult to run a business there.

But I'm sure it wall be fine. We can trust the Met Council to do the right thing. After all, they are accountable to the people, right? There's no chance that the Met Council chairman would be the husband of the governor's chief of staff, right? It's all on the up and up.