Sales tax vote appears headed for referendum
|
Up until this point, an increase to the city’s sales tax has only been an idea and was almost discarded the last time it was discussed. But officials meeting for the Board of Mayor and Aldermen said they would like the 3/4-cent sales tax increase to be given serious consideration before approving it unanimously on first reading Monday.
Mayor Royce Davenport pointed to the math, noting a city resident whose house is appraised at $50,000 with the current rate of $1.94 per $100 of assessed va-lue pays $243 in property taxes a year. Under a 3/4-cent local option sales tax increase scenario, the potential to lower the city’s property tax rate to 78 cents could exist, he said.
“If that were to be the case, if the property tax rate could be lowered to 78 cents per $100, then that same person who paid $243 in property taxes would pay $98,” Davenport said, although qualifying his statements by noting a fear of fluctuations in future sales tax revenue. “I just don’t want somebody to scream bloody murder because it’s 79 cents.”
Other officials clarified the estimates for more than $1 in property tax relief have been based on sales tax revenue from fiscal year 2001-2002.
Davenport said while there is no absolute guarantee, a city increase in the local option sales tax would allow “non-property owners” to share the “tax load” with McMinnville residents. He also said there is a possibility the state could adopt a uniform 2.75 percent rate and retain the 3/4 of a cent.
“If we don’t take it now for the city of McMinnville, possibly next year, the state could take 75 cents out of every $100 for their own,” Davenport added, while Alderman Rickey Jones noted most neighboring municipalities’ local option sales taxes are higher than McMinnville’s tax.
Included in their official ordinance was wording that noted the proceeds of the increase would be designed to “lower ad valorem property taxes.”
Officials previously said they would like that wording to be included on the ballot when people vote, but said state law won’t allow it.
“Early on, I didn’t think that we could stipulate why you were doing this – that it was your intent to use this to lower property taxes,” City Administrator Herb Llewellyn told board members. “We did it. While it can’t be on the ballot, it can be in the law. And so what you pass here tonight talks about is the reason you’re doing this. The reason you’re giving voters that ability is to lower the property tax. Everyone should understand and your law says why you did this.”