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Sales tax vote canceled in wake of downturn

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Sales tax vote canceled in wake of downturn

By
Christine Reid

Even as business closures due to the state coronavirus emergency have started cutting into city revenues, city commissioners voted Monday to rescind their call for a vote to increase sales taxes.

Voters were supposed to cast ballots April 7 on a proposition to create an additional half-cent sales tax to fund capital improvement projects.

As the coronavirus crisis started to unfold, commissioners voted at an emergency meeting last month to reschedule that election to June 30, coinciding with the party primary elections.

But as local virus cases started to appear and businesses were closed by state and municipal emergency orders, City Manager Dave Slezickey decided to ask commissioners to reconsider the election altogether.

“Even if we’re back to normal by June 30, the economy probably wouldn’t be,” Slezickey said. “It’s just not a good time to ask people for more money.”

Agenda proposals for Monday’s regular monthly commission meeting, conducted via Zoom video conference, included rescinding the sales tax proposal entirely or reducing the proposed tax to a third-cent.

After some discussion, Mayor Steve Richards and commissioners Tammy Mueggenborg, Roxie Alexander, Bill Tucker and Wendell Prim voted unanimously to cancel the vote.

Tucker suggested that voters might still be willing to “do something for police and fire right now,” since construction of new emergency service facilities are a top priority for the capital improvement sales tax.

“We thought of that,” Slezickey said. “But even if everyone’s hearts and minds are with the fire and police departments right now, their wallets may not be.”

“If we did it now, I just think we would be showing the people that we want their money, regardless of what the situation is,” Prim said, in voicing his support for rescinding the sales tax proposal.

“It’s tough right now and I don’t know when doors are going to open back up and when oil is going to be drilling again,” Slezickey said. “I’m hoping by late summer or early fall. If it is a lengthy return to normal, we would have the opportunity to come back later and call for the third cent rather than the half.”

A third-cent tax would be replacing another tax of the same size that expires in October, resulting in no actual sales tax increase.

“I’m hoping we would have more support and more faith from our citizenry because we did wait (to ask for the tax increase),” Slezickey said.

In her report to commissioners, City Treasurer Anita James said that the city’s revenues had fallen off to 2017 levels and the city’s general fund and public works authority had both suffered losses over the last month.

“And I have no idea what’s going to happen to sales tax over the next few months with so many businesses closed,” she said.

James added that statewide sales tax revenues had already fallen off by 11 percent, but she pointed out that the city still has $5.8 million in reserves that will provide some cushion against future revenue losses.

In his report to commissioners, Slezickey said that City Hall still had a few of the 2,000 cloth masks the city had purchased for free public distribution.

In response to a question from Tucker, Slezickey said he wasn’t ready to recommend amending the city’s emergency declara-tion requiring residents to wear masks when out in public.

“Our goal in getting masks out to people is hopefully if they have them then they will use them without us having to get into enforcing a rule about that,” he said. “But nothing is preventing stores from requiring people to wear masks right now.”

“This next two weeks we’re going to see whether it’s a flat line or surge and whether that (a mask requirement) is necessary,” Richards said. “I would strongly recommend that if people are going to the grocery stores that they wear gloves and a mask.

“It’s not a mandate and that’s not our intention, but it would protect themselves and the public.”