Raising sales tax on hold

By AMY SATTERWHITE / Staff Reporter for the Southern Standard

NUNLEY

A proposal to ask city voters to voluntarily increase the local option sales tax appears on hold after some city officials said they doubted voters would approve.

For the past few months, city leaders have discussed and proposed a 3/4-cent increase to the 2 percent local option sales tax to either offset losses due to state budget problems that could result in the loss of some state-shared revenues, or reduce city property taxes, or a combination of both. But they indicated they do not plan to seek a referendum in the very near future.

After putting a preparatory ordinance in place last month that could lead to a resolution asking the election commission to call for a referendum, some officials said at the last Board of Mayor and Aldermen meeting they were looking to plan the election before the end of the state’s fiscal year.

But when Finance Committee Chair and Vice Mayor Patti Nunley asked if there was a motion to recommend a so-called sales tax resolution to the board during a joint Finance and Building and Grounds Committee meeting Monday, no motions were made.

Nunley has opposed another sales tax referendum since a similar issue was defeated in November. She expressed doubts about a sales tax increase being approved by voters and feared thousands of dollars in special election costs would be wasted.

“I firmly believe that it will not pass. People hate the sales tax and hate the thought of it going up any higher than it is now and hate the idea of any tax,” Nunley said, adding if the city needed to raise taxes by 1 cent, that 1 cent would be wasted on the cost of the special election alone if the proposal failed.

Mayor Royce Davenport said the city is not interested in pursuing a local option sales tax increase “at this time.”

“Basically, they passed on pursuing this in the near future. They felt it would not be likely to pass and did not want spend the city’s money on the referendum,” he said.

If loss of state-shared revenue comes becomes reality and the city does suffer some losses at the hands of state government, he said there are only a few choices.

“We’ve got choices of raising taxes, which nobody wants to do that at this point, or cutting services or personnel,” Davenport said.

Approval of the 3/4-cent increase would make the state and local sales tax on non-food items in McMinnville total 9.75 percent.