A newly formed group of Minot residents and Chamber of Commerce businesses announced Wednesday that it will conduct an informational campaign for a ballot measure that directs proceeds from a city sales tax to new uses.
Citizens for Property Tax Relief supports an amendment to the sales-tax ordinance that funds the Northwest Area Water Supply. The amendment provides for the 1 percent tax to go to other uses once the city has all the dollars needed to fund the local share of NAWS, which could happen by the end of the year.
The amendment would continue the tax with 40 percent going to infrastructure and 30 percent each to property-tax relief and community facilities. Minot voters will decide June 14 whether to approve the change.
Minot City Council president Dean Frantsvog speaks at a new conference Wednesday announcing creation of a committee to support a positive vote on sales tax continuation. Behind him, from left, are Bob Schempp, Dean Somerville, John MacMartin and Wendy Howe.
"This would not be another tax placed on our citizens," said Dean Frantsvog, council president and spokesman for Citizens for Property Tax Relief. "They are not going to see a sales tax increase. It's just an adjustment of where that money is going."
The purpose of the citizens group is to inform rather than sway voters, although Frantsvog said voters are likely to recognize the benefits of the amendment. The committee still is considering how best to communicate the information to the public.
At a news conference Wednesday, Frantsvog cited the $122 million in capital improvement projects needed in Minot in the next two years.
"Minot is growing," Frantsvog said. "You can see the changes in our community. We want to keep up with those changes. We all know those changes take money, and we want to use this sales tax to keep up with those changes."
Minot's other 1 percent sales tax is split with 50 percent going to capital improvements, 40 percent to economic development and 10 percent to property-tax relief. Between 1992 and 2007, Minot collected more than $30 million for facilities such as the All Seasons Arena, Minot State University, airport, parks, landfill and fire and police stations.
"We want to continue that program and continue making Minot a great place to live and work," Frantsvog said. "Without the sales tax in place, these improvements, if they got done at all, would have to fall on the taxpayers and would fall on the property-tax system of Minot. This is a proposal to help eliminate or reduce those taxes."
In addition to shifting some of the tax burden, the sales-tax amendment provides $2.5 million in direct property-tax relief, based on an estimated annual collection of $8.6 million from a 1 percent tax. That amounts to a 21 percent reduction in the city's share of property taxes, or about $100 on a $100,000 house.
John MacMartin, president of the Minot Area Chamber of Commerce, said continuation of the tax is key to holding down property taxes and utility rates for residents living on fixed incomes.
"This continuation of the sales tax will allow those increases to be mitigated and to see a property tax reduction each year on the city portion of the tax bill. So that's why the Chamber is so enthusiastic about this opportunity," he said.
Wendy Howe, executive director of the Minot Convention & Visitors Bureau, said visitors to Minot count on the city's ability to provide facilities for the region.
"It's very, very important for them to have these facilities and to have the infrastructure," she said. "With these visitors using these facilities and using the infrastructure, it makes sense to have them paying the sales tax, which then will help pay for these facilities."
The amendment enables the city to re-allocate a share of the sales tax to NAWS if it turns out that more money is needed after the tax is re-directed. Bob Schempp, a member of the citizens committee and chairman of the NAWS Advisory Board, said calculations of future costs are solid but could be affected by inflation, depending on how long it takes to complete the project.
According to Schempp and the city finance office, the NAWS account should have between $43 million and $45 million remaining at the end of the year.