Tourism and lodging are nearing the levels they were before the COVID-19 pandemic.

The summary of the proposed 2023 city budget was presented before the Baxter City Council meeting July 5.

There are no significant changes in state aid, taxes, or new legislation expected, city staff reported. Finance staff is in the process of obtaining figures on the city’s new construction and change in estimated market value.

Although this was the first summary of the proposed budget, there were notable increases in certain tax receipts. The two categories that had a significant increase were lodging receipts, which saw a 43.5% increase; and local option sale tax receipts, which were up 23.6%.

The lodging taxes account for the collection of lodging tax revenues and the promotion of tourism for the city. The large increase puts tourism and lodging in close comparison to 2019 prior to the COVID-19 pandemic. This parallel between 2019 and 2022 means that tourism is increasing again.

“From the lodging tax, 95% of what we collect goes to our marketing efforts, that is all done through Visit Brainerd,” said Brad Chapulis, the city administrator of Baxter. “So 95% of that will go there and the other 5% is covered for administration of the collection.”

A graph showing receipts from the 2022 Baxter Budget spanning the past four years.

A graph showing the local option sales tax receipts for spanning from 2019 to March of 2022.


Local option sales tax receipts for the first three months of 2022 were 23.6% higher than 2021. Compared to 2019, 2022 collections were 49.8% higher through March.

“The local option sales tax was voter approved and identified the areas in which the money will be used for transportation safety,” Chapulis said. “The cost of doing business is greater these days. So we don’t at this point in time, don’t see that there will be a net impact. We see it as covering the additional cost of doing the improvements.”

On the other hand, the motor vehicle excise taxes were down 19% for the first five months of the year compared to 2021 and are running lower than most of the same months of the prior three years, Chapulis said.

“With the adoption of the local option sales tax, doing a large sales tax on motor vehicles and things like that are not attainable,” Chapulis said. “So instead of doing the half cent sales tax, we do what is required by law, a flat fee of $20 per vehicle.”

A graph showing receipts from the 2022 Baxter Budget spanning the past four years.

A graph showing the motor vehicle excise tax receipts for spanning from 2019 to May of 2022.


The sales tax collections special revenue fund is used to account for financial resources financed by sales tax collections. Primary revenues are the local option sales tax and motor vehicle excise tax. These revenues are legally restricted for the funding of infrastructure projects.

The council discussed increases to residential valuations, holding the levy near a 0% increase, reserve fund balance policy, employee work-life balance, the need to increase efficiencies, and technology updates.

City staff will continue to develop a proposed 2023 budget. The council is scheduled to have an Aug. 30 work session to further discuss the budget.

SARA GUYMON, Brainerd Dispatch, staff writer, may be reached at 218-855-5851 or

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