Grand Island council talks sales tax increase
Voters in Grand Island will soon decide whether or not to max out the city's sales tax, upping it from 1.5 percent to 2 percent.
About a dozen towns in Nebraska are already at the highest level allowed by law. Locally, towns like York and Minden are at 2 percent, but G.I. would be the first Tri–City community to get to that level.
Tuesday, the City Council discussed the proposed half cent increase during a meeting.
G.I.’s Public Works director said the budget for capital improvement projects keeps going down -- declining in the last 16 years from $6 million to less than $4 million.
"But every year you've got a bit of money going from the general fund to [capital improvement projects] and this is the funding that's disappearing," said John Collins.
"What I think we need to think about is is a way to get that trend line at least started to level off and start creeping back up," said Mayor Jeremy Jensen.
Collins shared preliminary results of a pavement study Tuesday, showing the condition of G.I.’s streets is 10 percent above the national average, but $37 million in projects are still recommended in pavement alone.
More than $240 million in projects are on the city's wish list.
One of those is repairs to the Sycamore Street underpass. A citizen asked if Union Pacific would pay for the project since its trains pass over it. Collins said the railroad company is responsible for parts of the structure, but they are not contracted to pay for most of it.
Councilman Mitch Nickerson said a long term infrastructure replacement plan was probably needed years ago, but he said the blame shouldn't go to past staff, mayors or councilmembers.
"Part of it is reduced funding. We know that's part of it. We don't have as much money coming to us as we have in the past. But, I think one of the reasons is we're a growing, progressive community with aging infrastructure," said Nickerson.
City leaders hope voters pass a half cent sales tax increase to help.
It would last 10 years or until bonded projects were paid off and is projected to bring in $5.5 million more annually. It could only be used for public infrastructure and capital improvement projects, according to state law.
Tuesday, no one on the council spoke up against it.
"They may not have to raise property tax for five years if we get this, maybe 10 if we can budget right and get our house in order, but we've come to an either or spot now," said Councilman Mike Paulick.
The city would not have to ask voters to increase the property tax levy.
Mayor Jensen said even if they maxed that out it would bring in about the same amount as this sales tax increase with no chance for growth unless valuations went up.
"I can absolutely tell you that with this it'll certainly help us in terms of overall taxes. I would love to be able to look people in the eye and say I can guarantee you that we're going to lower property taxes. I can't do that, but I can tell you that if we don't do it they will have to increase," said Jensen.
The sales tax appears as two questions on the ballot. Both would need to be approved to raise the tax.
- Shall the governing body of the City of Grand Island increase the local sales and use tax rate by an additional one-half of one percent (1/2%) from the current rate of one and one-half percent (1 1/2%) to a rate of two percent (2%) and impose a sales and use tax at the increased rate upon the same transactions within such municipality on which the State of Nebraska is authorized to impose a tax, the revenue from such increased rate to be used for public infrastructure projects as allowed pursuant to the Local Option Revenue Act, which increased rate shall terminate no more than ten years after the effective date of the increased sales and use tax or, if bonds are issued and the local option sales and use tax revenue is pledged for payment of such bonds, upon payment of such bonds and any refunding bonds, whichever date is later?
- Shall the governing body of the City of Grand Island increase its budgeted restricted funds for fiscal year 2017-2018 by five million five hundred thousand dollars ($5,500,000), sixteen percent (16%) over the current year’s restricted funds?