Coon Rapids Council Explores Local Sales Tax Option for Community Projects

Coon Rapids City Council took its first formal step toward a potential local sales tax referendum during its January 6, 2026, meeting, signaling a renewed focus on long-term capital investments amid rising construction costs and aging public facilities.

At the center of the discussion was Resolution 26-24, unanimously approved by the council, which authorizes city staff and lobbyists to seek state legislative approval for a local option sales tax. Under Minnesota law, cities may not impose a sales tax without explicit authorization from the Legislature. Even with state approval, the tax could only take effect if Coon Rapids voters approve it in a local referendum.

Why a Local Sales Tax Is Being Considered

City leaders framed the proposal as a strategic response to mounting infrastructure needs that cannot be sustainably addressed through property taxes alone. Two major projects were cited as the primary drivers:

• Police Station Expansion: The current facility has outgrown its original design, placing strain on operations, evidence storage, training space, and staff accommodations. City officials have noted that modern policing requires additional secure space and updated infrastructure that the existing building cannot fully support.
• Community Center Expansion: The Coon Rapids Community Center continues to see strong demand for recreational programming, senior services, and community events. Expansion would allow the city to better serve a growing and aging population while maintaining accessibility and program quality.

A local sales tax, council members emphasized, would allow the city to fund these large-scale capital projects while distributing some of the cost burden to visitors and non-residents who shop, dine, or attend events in Coon Rapids.

How the Process Works

The approval of Resolution 26-24 does not impose a tax. Instead, it initiates a multi-step process:

1. State Legislative Approval: The city must secure enabling legislation during the 2026 Minnesota legislative session specifying the tax rate, duration, and eligible projects.
2. Voter Referendum: If the Legislature authorizes the tax, Coon Rapids residents would then vote on the proposal in a citywide election.
3. Dedicated Use of Funds: By law, revenue from a local option sales tax must be restricted to the projects identified in the authorizing legislation and approved by voters.

The council discussed a half-percent sales tax as the working framework, consistent with similar measures adopted by other Minnesota cities for capital improvements.

Broader Financial Actions at the Meeting

In addition to the sales tax discussion, the January 6 meeting addressed several routine but consequential financial and administrative items, including updates to the city’s external auditing policies, renewal of municipal insurance coverage, and reports on ongoing community engagement efforts. Together, these items underscored the council’s broader emphasis on fiscal oversight, risk management, and transparency.

What Comes Next

City officials will now work with legislative partners to advance the authorization request at the Capitol. No timeline has been set for a referendum, and council members stressed that community outreach and public education will be essential before voters are asked to decide.

If ultimately approved by residents, the local option sales tax would mark one of the most significant funding decisions in recent Coon Rapids history, shaping public safety infrastructure and community amenities for decades to come.

MinneapoliMedia