It's 50-50: City sticks with taking half of tax

Talk about it

Despite a new proposal by the Jamestown/Stutsman Development Corp. Board, the City Council’s Finance and Legal Committee stuck with taking half of the 1 percent sales tax at its meeting Tuesday.

The committee did, however, extend the sales tax to 2018 rather than 2022.

After a discussion with Councilman Pat Nygaard nearly two weeks ago, the JSDC Board proposed a 45 percent city and 55 percent JSDC split. But Nygaard said a story in Friday’s The Jamestown Sun on the proposal was not accurate as the split was only an option.

“I didn’t feel comfortable recommending (the option of) 45 percent and 55 percent to the council,” he said.

Although Councilwoman Kelani Parisien indicated previously she thought the proposal was a workable solution for both parties, she said nothing.

JSDC President Jim Boyd said there were three parts to the latest JSDC recommendation. One was changing the split to reflect the sales tax subcommittee’s proposal, to give the city 30 percent of the sales tax. The city would pay the $280,000 toward the bond on the wastewater treatment plant. Both equal 45 percent of the sales tax funds. In this new version, the council has claimed responsibility for future economic development infrastructure.

The committee agreed to specify in the ordinance city infrastructure only. However, Parisien said the JSDC’s policies and procedures already allow the JSDC to do infrastructure for economic development so there was no need to include that in the ordinance.

The JSDC Board also objected to the council’s extension of the sales tax until 2022. Part of its proposal was to put the issue on the ballot in 2012. Its original sunset date is Dec. 31, 2012.

“You took the voters out of the loop,” Boyd said. “2012 is more equitable for voters.”

Mayor Clarice Liechty said if the JSDC wanted to put its half of the 1 percent sales tax on the ballot in 2012, it could. The city’s half would be in effect until 2022. She made a motion to that effect, but it died for lack of a second.

Boyd said residents voted the 1 percent sales tax to be dedicated to economic development. Nygaard noted the ordinance voters approved also included infrastructure for economic development. He said the storm and sanitary sewer systems upgrades are important to economic development.

“We’re trying to find middle ground here to minimize the impact on economic growth,” Boyd said. “Economic development grows the tax base, the population and business.”

Dan Akey, director of operations at Cavendish Farms, said taking economic development funding is a shortsighted decision by the council. The national economy is shaky especially for manufacturers. And the local economy needs its manufacturers doing business, he said. In a 2005 economic impact study by North Dakota State University, he said every $1 Cavendish spends yields the state economy $2.79. And although the french fry plant has 210 employees, secondary employment, such as potato farmers, truckers and others in connected jobs, multiplies that number into 3,000.

“Taking money away from the fund will hurt the community,” Akey said. “You need to go to the people and abide by the vote.”

Corey Behr, a property and business owner in the city, said a poll in The Jamestown Sun showed “that the consensus of the community is this money was voted for economic development and that’s were it should go.”

The committee did eventually agree with Parisien’s suggestion to extend the sales tax to 2018, rather than 2022. The mayor said the extension “went out to 2022 for bonding purposes.”

Nygaard said that it was unnecessary for bonding purposes. Parisien said she wanted it to go on the ballot during an election year and avoid special elections.

City Administrator Jeff Fuchs said there were two reasons he could suggest for the 2018 vote. The 1 percent sales tax for the new high school will end in 2017 and the $280,000 payment on the wastewater treatment plant will end in 2016.

“There will be options available then,” he said.

With the only change the sales tax extension date, the committee voted unanimously to move the amended ordinance to its second reading at the April 5 City Council meeting.

Sun reporter Toni Pirkl can be reached at (701) 952-8453 or by e-mail at tonip@jamestownsun.com

Tags: local news, news, city, jamestown, sales, tax, stutsman