With no way to predict the future economy, there is no way to predict exactly how fast Cook County will pay off the $20 million it spent in bond money secured from the recreational and infrastructure sales tax, but so far, said Auditor-Treasurer Braidy Powers, the county is ahead in sales tax collections.
“We predicted we would take in a little more than $1 million a year, but this year we will collect more than $1.4 million,” Powers told the Cook County News-Herald.
Area businesses, bars, restaurants, hotels, motels and retail stores collect the 1-percent tax and pay it to the state which redistributes it back to the county. The county in turn, uses those proceeds to pay off two bonds, plus the interest on those bonds.
In 2011 the county collected $1,131,199.5. In 2012 collections totaled $1,234,19.33. In 2013 $1,413,839.83 was taken in. The year of 2014 was another big year at $1,416,144.25 and in 2015 (from January through October) the county has collected $1,324,708.29, which is well on pace to set a new record.
The one-percent sales tax is paying for recreational facilities at the Cook County Community Center ($50,000 for a hockey rink) and Birch Grove Community Center ($970,000), capital improvements to Superior National at Lutsen ($3,100,000), a Grand Marais library addition ($1,474,70), a new community center/pool facility (the Cook County Community YMCA) ($9,75,814), and a fiber optic cable network bringing ultra-high speed internet (broadband) ($4,000,000) to the county.
A biomass-fueled energy plant in Grand Marais was also the recipient of some 1 percent funds ($355,000) but when the Cook County North Hospital and Care Center declined purchasing power from the proposed heating district, the proposal was ended.
Another $279,426 in uncommitted funds have also been spent.
If the county keeps collecting 1 percent sales taxes at the current rate, Powers said it would be conceivable that both bonds are paid off by 2022. But he made no promises.
“We can’t predict coming recessions or other possible interruptions in the economy,” he said.
One bond must be paid off by 2022 and the second can be paid off in 2035, but, said Powers, that also has an early payout of 2022 and can be paid off at that time if collections remain high or go higher.
The 1 percent tax was implemented after 64.2 percent of Cook County voters cast ballots in favor of it in the fall of 2009. Previous to that the county collected a 1 percent sales tax that was used for building and infrastructure projects at the Cook County North Shore Hospital and Care Center.
Once this current tax is paid off, the only way another one can take its place is if the county asks the Minnesota Legislature to pass a bill in favor of allowing the county residents to vote to establish another tax.
For now as long as Cook County remains a trendy place to visit, the payout on the bonds will be ahead of schedule.
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