Mayor Ted Eyre has recommended a new local sales tax as part of his proposed budget for 2015-2016. The new tax would be 0.2% charged at every point of sale within Murray and would fund projects the City has been unable to do otherwise.
In his May 5 budget address to the City Council, Eyre explained that the state changed its tax distribution formula in 2006. While most cities statewide saw an increase in their share of sales tax received, Murray City was among a handful that saw their sales tax revenues decrease significantly.
According to Justin Zollinger, Murray City finance director, the City took a $1.5 million hit with the change to sales tax distribution, measured in recession years. In non-recession years, this hit reaches $2.73 million. A property tax increase has covered a portion, but not all, of the loss.
Eyre explained that in 2008, the state legislature realized that cities such as Murray had suffered the unintended consequence of the changed tax distribution formula. To provide relief, they made it possible for those cities to enact a 0.2% local sales tax, which translates to $.20 on a $100 purchase. Eyre is recommending that the City put this local sales tax in place as of October 1, 2015.
Eyre already has many projects in mind to utilize the funds that would be generated through the local sales tax. The list of unfunded projects has grown since 2008 and will continue to grow without additional money.
First on the mayor’s list is public safety. Several years ago, the City offered a retirement incentive to help balance its budget. Two firefighters and five police officers accepted that incentive and have not been replaced to date. Eyre considers public safety a major priority and wants to replace both firefighters and three police officers with the new funds.
Eyre also acknowledges that many roads are in need of repair. Part of the additional funds would be combined with gas tax revenue to maintain and repair roads.
“We’re trying to put a lot of money into roads this year and make some repairs and start catching up with the sales tax dollars. If we don’t pass the sales tax it’s a moot point because there’s no money to do those additional roads,” said Zollinger.
Recreation projects also made it onto the mayor’s list.
“We have plans to remove the old ice skating arena and replace it with new restrooms, a new pavilion and a splash pad. This project will take a couple of budget cycles and will vastly improve that area of Murray Park and provide new amenities for residents to enjoy,” said Eyre. Neighborhood parks would also be upgraded with additional playground and bathroom facilities.
Other projects include converting the city-owned Armory building to a community building and upgrading the animal shelter.
The sales tax option has a sunset provision in 2030, and Eyre wants to do as much as possible until then. Zollinger shares the sentiment.
“We would balance the budget, we would make every dime work we could, but if you want to get these additional roads fixed and parks improved it just takes more money.”
Eyre is confident the local sales tax will provide substantial and tangible benefits to the City.
“I can promise you that funding from this local option will provide visible improvements that can be detailed and shared with our citizens through the years.”
In response to the mayor’s address, Councilmember Dave Nicponski stated that the proposed 0.2% sales tax is an adjustment to correct for the loss of funds the City suffered with the changes in tax distribution. The City is looking to replace those funds to be able to provide services and capital improvements to the community.
Zollinger also looks forward to the work that can be completed should the new tax be enacted.
“I’m excited for the roads that we can do, especially if the sales tax goes through. I’m excited for the parks and the pavilions we can improve and make new. I’m excited for the positive things that could result from it. Hopefully, our citizens appreciate it, too. We’re doing our best to manage the funds that they’ve given us stewardship over.”
The mayor’s proposed 2015-2016 budget includes funds that would be received through the new sales tax. Should the City Council not vote in favor of the tax, the budget revenue and expenditure would have to be rolled back.
The City Council plans to vote on the proposed tax in its June 16 meeting.