Sales tax may be sought for transfer station
Next year’s property tax rate is likely to stay the same even though tax bills are expected to rise. But, in a surprise move, voters may be asked to approve a new sales tax to pay for a waste transfer station or road repairs.
Those were among the trial balloons floated toward the end of a marathon 6½-hour county commission meeting Monday during which commissioners took their first long look at what a state tax lid and increased assessed valuation could mean for the county.
Rising assessments mean the county can collect more in taxes while seeming to hold the line on rates.
“But we’re about to top out on that cycle,” chairman Kent Becker warned.
And with insufficient revenue from trash fees to cover even short-term borrowing, the county faces a dilemma of how to pay for its oft-delayed and ever-changing plans to replace its state-mandated transfer station without gutting its road budget or abandoning what it considers to be fiscal prudence of having half a year’s budget set aside in rainy-day reserves.
Becker and fellow commissioner Randy Dallke informally agreed Monday that next year’s tax rate should be the same as this year’s despite an increase in valuation that will result in increases in many taxpayers’ bills.
Commissioner Dianne Novak wasn’t as certain but did agree that the rate should not go up.
“All the chatter that I hear is it’s preventing us from getting industry in here,” she said. “We’re kind of chasing our tail. We raise a lot of money but then we shoot ourselves in the foot by not bringing in industry because they can go to our surrounding counties a lot cheaper. I think about this all the time. That’s all that I hear.”
“Dianne, she’s gonna start right there. She wants to cut the tax levy down,” he said. “But if we keep cutting it like this, drop it two or three mills every year, and then three years from now we hit this peak where it goes the other way, we’re in a bigger hole.”
The peak and ensuing hole Dallke envisions would be created by assessment formulas and the state’s tax lid, which generally limits increases in spending to the rate of inflation and freezes tax rates.
If valuation — which, for farmland, is based on a rolling average of farm revenue —declines as expected in response to recent years of extreme weather, the county could find itself having to tax more to get less in future years. And the lid could prevent it from relieving any of the pressure caused by falling valuation.
Even now commissioners fear they won’t have enough to pay for the transfer station and road repairs.
They had planned to pay for at least part of the still undetermined cost of the station via a short-term lease-purchase agreement.
However, revenue generated by trash fees would be insufficient to cover lease expenses within the time frame most lenders would require, commissioners were told Monday.
The alternative, accountant Scot Loyd said, would be to raid the county’s general fund reserves, set aside largely to pay for major road repairs, or to submit the issue to voters — which commissioners seemed inclined to do but were fearful of the results.
“I would vote for a mill levy increase, but you won’t get the general public to vote for a mill levy increase,” spectator Chuck Seifert told commissioners. “Mine would have to be designated to roads and bridges — not to hiring more personnel or equipment, because as you all know there’s no way we can ever fix these roads and bridges without outside help.”
Seifert said he preferred a sales taxes to property taxes because a sales tax would be largely undetectable, even if economics experts say it is one of the more regressive of taxes, excessively burdening less-affluent people.
“Damn the transfer station. Fix the roads,” Seifert said. “Asking me to vote on a sales tax for a transfer station is like being between a rock and a hard place. I don’t believe in the transfer station. We got that crammed on us and we’re paying for it dearly.”
He recalled the defeat of a proposal 13 years ago to locate a regional landfill in a former quarry northeast of Marion.
“Several years ago, we could have had millions in this county,” he said. “We wouldn’t have had a transfer station to spend that money on. We could have had money from tipping fees to fix our infrastructure, which desperately needs it.”
A free radical in the commissioner’s calculations is what it will cost to repair county roads, damages to which from unusually rainy weather this year still are being assessed.
Already the county has spent most of this year’s planned allocation for road rock, and commissioners fear money set aside for chip-sealing other roads will have to be diverted to rocking washed-out roads.
Seifert urged commissioners to seek as much as possible in the way of payments in lieu of taxes from the proposed 10-year-tax-exempt Expedition Wind project.
“Let’s start with — I’d just pick a big number — like $10 million per year, starting with the first year of operation,” he said. “Every single taxpayer could benefit from them, not just a few people.
“You know they’re not going to give that, but I mean, back it up to half. If we could get half out of them, that would be something that a lot of us who are opposed to them — maybe not Randy [Eitzen] — we probably could gag the thing down or put up window blinds and just not look at the things.”
Seifert urged the county not to give in to pressure to have Expedition’s payments go to local schools.
“Everybody wants to give to the schools, but the schools are in great shape. They don’t need more money,” Seifert said.
Becker challenged that statement, but Seifert responded:
“For what, Kent? Not for teacher’s salaries. It’s for entertainment. What can we possibly do with declining enrollment that the schools need any more money for. We have all the school infrastructure we need — and more.
“I paid for city school buildings I don’t need. It’s time for city people to pay for rural roads we need.”
Novak said Tradewinds in the northern part of the county would be paying only $200,000 a year— a fifth of what other wind farms were paying their counties.
Commission candidate Jonah Gehring, the only one of four candidates to stick with the meeting all the way to its end, said if Expedition paid $1 million it would be only half the taxes it would owe if not exempt under state law for 10 years.
Seifert was misidentified in earlier versions of this story.
Last modified June 28, 2019