November 30th, 2015 Bismarck Sales Tax Plan Illustrates Misplaced Priorities City's never-ending desire for higher taxes ignores the current economi

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November 30th, 2015

Bismarck Sales Tax Plan Illustrates Misplaced Priorities

City's never-ending desire for higher taxes ignores the current economic realities in North Dakota.

Bismarck Road Sales Tax Article

As conservative of a state as North Dakota is, and for as much as the legislature is willing to at least make small moves to reduce tax burden, local government just cannot get enough of your money!

In Bismarck, for example, since 2006 there have been no fewer than three major sales tax increases proposed, with only the jail tax passing.

• 2006: People, Places, Parks was the Park Districts attempt to increase the sales tax for their purposes – that was defeated by a two to one margin.

• 2008: Quiet Rail funding via the sales tax was requested by the city without an increase, and still failed.

• 2012: Civic Center: The city tried to convince voters to increase the Lodging and Restaurant tax to fund the $90 million Civic Center expansion. The commission went and passed a $35 million expansion plan without the tax.

• 2014: Burleigh/Morton combined regional jail needed a ½ cent sales tax increase, and passed.

Bismarck Sales Tax Opinion

Hot off its decision to provide $35 million worth of corporate welfare to the FiveSouth project, the Bismarck City Commission now wants to increase the local sales tax by another 1% to provide $17 million a year for road repairs. The question for local taxpayers to ask now should be: how is the city budget so messed up that it needs to increase the sales tax? The answer requires remembering the last time the city tried to increase the sales tax.

In 2010, then-mayor John Warford came up with a plan to add a 1% sales tax to do what the current 1% sales tax does (buy down property taxes) and then use the old 1% sales tax to expand the civic center. It was the quintessential definition of a shell game.The public voted down the $90 million dollar (Civic) Event Center expansion, so the city went ahead and proceeded with the now-complete $30 million expansion plan using the city’s hospitality sales tax on hotels and restaurants.

After finding a way to defy the voters on the Event Center, the city commission says it can’t fund the most basic of all things government does – building and maintaining roads.

DG SalesTax OpEd

How can this be? Why is the hardest thing for local government its most basic role?

The answer can be found, in good measure, by looking at the city’s tax abatement policies.

Every time the city gives a property owner a partial or full property tax break for years on end (i.e. Renaissance Zone), or diverts the property tax revenue from a section of town to something other than the general fund (i.e. Tax increment Financing – T.I.F.) those are dollars that cannot be used for the basic functions of the city government – like roads.

The need for a sales tax increase is a direct result of the city’s decisions in other areas.

In the October 14th edition of the Tribune, City Commissioner Steve Marquart appropriately asked why this sales tax increase is coming up immediately after the corporate welfare give-way using the T.I.F. powers of the city – Mayor Seminary said that is a separate issue.

Apparently the mayor’s philosophy for governing means that nothing the city commission does has an impact on the city’s finances, and that it should not be brought up. He verbally slapped commissioner Marquart by saying “that’s totally irrelevant; this is sales tax not property tax.”

Money is money. All of the city’s taxes go into the general fund, unless the city chooses to divert or abate those taxes that should apply to certain properties.

Nothing happens in a vacuum, every city commission decision has an impact on future needs – despite what Mayor Seminary may think.

Luckily, the tide may be already turning against this plan to increase the sales tax. Both commissioners Parrell Grossman and Steve Marquardt have, as part of their candidacy declarations, said they do not support the sales tax increase idea.

Voters will just have to be sure to hold these two commissioners to that, and get another willing to say NO.


-Dustin Gawrylow, Managing Director

North Dakota Watchdog Network

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