Explaining intent of 1/8 cent sales tax increase
August 9, 2014
Confusion abounds about how and where taxes may be used. The recently passed 1/8 cent sales tax and defeated downtown library project are examples in which people question what items sales tax be used for. I've heard comments such as: "Pay for the wastewater treatment improvements with the 1/8 cent sales tax," and "Voters already defeated the 1/8 cent sales tax in the last election!" In reality, neither of these statements are completely true.
In the last election, the voters defeated an advisory question to implement a 1/4 cent sales tax specifically for a public/private downtown library project.
The current Board of Supervisors voted this past April to pass a 1/8 cent sales tax increase to fund various infrastructure improvements, a completely different scope of work from the library project, which may include: (1) an animal shelter; (2) a multi-purpose athletic center; (3) major corridor improvements on Highway 50 East, North and South Carson Street, and downtown; and (4) Carson City Community Center improvements. The 1/8 cent tax comes from a different statutory source than the 1/4 cent tax that was defeated and it can only be used for infrastructure projects and city facilities. April's vote allowed for city staff to complete due diligence into these projects to determine the feasibility of each, but the Board of Supervisors is not bound to move forward with any of these projects unless they are: (1) prudent; (2) cost effective; (3) sustainable; (4) needed.
Whether the 1/8 cent sales tax could be used for improvements to the wastewater treatment facility, the answer is yes…and no. The wastewater treatment facility would have had to be included in the Plan of Expenditure submitted to the State, detailing the projects the sales tax could be used for. The facility was not included in the Plan, therefore the funds cannot be used for improvements at the facility.
If included in the Plan, the facility would have qualified for funding from the sales tax, however the tax increase will only generate approximately $17 million in bonding capacity and in excess of $50 million would be needed for the recommended wastewater improvements over the next several years. The sales tax increase would have reduced rates by 1.5-2 percent ($.06 to $.10 in savings per month on average) per the analysis done by the consulting firm hired to analyze the facility improvements, meaning we would have still had to raise rates regardless and using the sales tax would have had minimal impact on rates, but a significant impact on bonding capacity. Rates would still have had to been raised to complete the facility improvements and would have used all of the available bonding capacity from the sales tax, leaving us without the ability to fund the projects that's ultimately part of the Plan of Expenditure.
The 1/8 cent sales tax is also helping to fund water and sewer lines in the commercial corridors, as we update the lines at the same time we tear up streets for the corridor improvements.
About 75 percent of the comments I receive (pro and con) related to the 1/8 cent sales tax are about the possible downtown improvements, and specifically, the narrowing of Carson Street. While important, this is one of many crucial parts of the overall improvement plan. All components of the Plan need to be coordinated and work fluidly with the others. The Plan is not about downtown, but about improving our city, making it easier for citizens (including pedestrians and bicyclists) to get around, make our commercial corridors safer (lighting, sidewalks, handicap ramps) and business friendly (wider sidewalks, benches, trash receptacles).
Frankly, what concerns me most is watching citizens walking in the road on Highway 50 East to get to the market, or seeing the blight on North Carson Street, or watching challenges at our animal shelter. Using the 1/8 cent sales tax to solve some of our long standing challenges is the right thing to do, however there is much work for us to ensure approved projects are done correctly. Questions will be answered in time and we will get it right, as we usually seem to. These are not projects that will happen overnight, nor will we be immediately prosperous or immediately thrown into a recession if we proceed. They are merely one step along our long path moving forward.
Brad Bonkowski represents Carson City Ward 2 on the Board of Supervisors. He can be reached at firstname.lastname@example.org.