On Monday, February 3, 2025, Rani Bhattacharyya, a University of Minnesota Community Extension Educator, presented during the Crookston City Council meeting. The Crookston EDA asked Bhattacharyya to provide the City of Crookston with a Retail Trade Analysis and a Local Option Sales Tax Analysis. “I work in the Valley Technology Park, which is the Business Incubation Center for the City of Crookston, and the Executive Director there, Karie Kirschbaum, asked me back in November to conduct a Retail Trade Analysis and a Local Options Sales Tax for the city,” says Bhattacharyya. “So she could, number one, better understand the retail mix in the community and then, with the Local Option Sales Tax, understand the potential revenue stream to pay for a new daycare facility in the community.”
Karie Kirschbaum, Community Economic Development Director, thought these studies would be a good tool in working towards some of the current needs of Crookston. “The reason I had the Retail Trade Analysis done was because I hadn’t seen a study since 2018 which was pre-COVID, and then I also asked for a Local Option Sales Tax Analysis to see what we have coming in,” says Kirschbaum. “The reason was, we are looking at childcare, and about six months ago when we heard that Warren had opened up that project up there, and it was pretty much paid for except they still have a low-interest loan out to the USDA.”
Kirschbaum says one of the biggest things needed in Crookston is childcare, as is the case everywhere in the state. Kirschbaum and other city officials, including Mayor Stainbrook and City Administrator Jeff Shoobridge, visited the new Warren Childcare facility this fall. “We met up with them and their Economic Development and their new City Administrator and they talked about the sales tax and how that was paying off the loan to the USDA,” says Kirschbaum. “So, we wanted to get a grip on what we could do in Crookston using a sales tax. I’m not saying we will do this; it was just something we searched out; it was me, Mayor Stainbrook, Council Member Morgan Hibma, Shoobridge, our Administrator, and a couple of other people who were with us.”
Kirschbaum said that at that time, she would do the research to see what could be done to pull something together in case something presented itself that made sense. That is where Bhattacharyya came in, as Kirschbaum asked her to do the study and provide the Council with her findings. “There are no plans to do any project to use a sales tax; it’s just information, so when we are talking as a council and as a community, we have the information.”
Talking with City Administrator Jeff Shoobridge about the presentation, his feelings seem to align with Kirschbaums. “The University of Minnesota always does real good research for us, and this is an analysis of what kind of revenue the city expects to see if we enact a local option sales tax,” says Shoobridge. “Any revenue from that would have to go to specific projects and reported back to the state.”
Shoobridge also referred to the city’s issue with childcare in Crookston and how this could be helpful in that instance. “You can have multiple projects, but right now, what we are gearing this towards, what our process is, is to assist in childcare facilities,” says Shoobridge. “That is a critical need we have here in the area, in the region, statewide, nationwide; childcare is a very hot-button topic because it’s scarce, just about everywhere.”
Shoobridge explained that the Retail Trade Analysis helped tell the council what types of establishments, not specific establishments, but types, Crookston has that perform well, that are underperforming, and which areas we should look at recruiting.
Crookston residents are feeling the effects of taxes being raised both in the city and Polk County, and hearing that this study was presented to the council could be a concern for many of the effects a Local Optional Sales Tax would have. Having spoken to Rani Bhattacharyya, City Administrator Jeff Shoobridge, and Community Development Director Karie Kirschbaum, it is clear it was a study done for information purposes only. Having this study done means that the information is at hand if needed in Crookston’s future.
Bhattacharyya’s takeaway from the Retail Trade Analysis was that the strongest retail sectors in Crookston were Building Materials, Food and Beverages, Lodging, Eating and Drinking, and Repair Services. The takeaway from the Local Option Sales Tax gave the council a picture of how going that route in the future would affect residents. “From the Local Option Sales Tax, it was about 60 percent of the Local Option Sales Tax would come from residents’ versus non-residents, which is about 39 percent,” says Bhattacharyya. “Therefore, having the Local Option Sales Tax would actually be a burden on the local community, rather than an external revenue stream from outside the community.”
According to Bhattacharyya’s report, here is what a Local Optional Sales Tax would look like for Crookston. With 39.6% of sales coming from non-resident spending and 60.4% coming from resident spending, a .5% sales tax would generate $370,000 annually (with $30.00 per resident); if it was a 1.0% sales tax, $740,000 would be generated annually (with $70.00 per resident).
