1% tax income compared to previous hospital tax

Some people might be wondering how much the new 1% sales and use tax is generating in this economy in comparison to what the previous 1% hospital tax brought in.

During the years 2002 through 2006, the hospital tax averaged a total income of $247,549.16 for the months of April through July. The new 1% tax took in $223,087.92 from April through July, the first four months it was collected, which is 90% of what the hospital tax averaged for those months. Thenew tax did better than the old one in each month except for April, which brought in significantly less.

Thehospital tax paid for renovations and additions to North Shore Hospital and Care Center. Thenew tax will fund up to seven capital improvements projects throughout the county that could include a community center and pool, outdoor recreational amenities in Grand Marais and Tofte, Superior National Golf Course improvements, a library addition, a biomass-fueled heat and electricity plant, and fiber optic infrastructure.

County Auditor-Treasurer Braidy Powers explained to the News-Herald
how long the county could take to generate $20,000,000 plus the cost of bonding, which is the maximum that state statute will allow this tax to bring in: “Thetax terminates at the later of 20 years or when the county determines that the amount of revenues received is sufficient to pay the principal and interest on any bonds or obligations issued to finance projects.”

The hospital tax was collected from 1994 to March 2008. For comparison purposes, County Auditor-Treasurer Braidy Powers recently reported to the county board the average of the years 2002 to 2006 because they were not unusual in any way. The hospital tax brought in significantly more in 2007, the last full year it was collected, which Powers believes is likely to be related to a large construction project at Minnesota Power.

These are specific amounts collected by the hospital tax—averaged over five years—and the new tax during the months of April through July, along with the percentage of difference between the two month by month:

The amount in the new 1% coffers from the month of April is actually only $12,377.08 because

21,417.71 in start-up costs went to the state.