Numbers make case for sales tax

Wednesday, February 21, 2007

When McCook's 1 cent sales tax was voted in in 2000, with a sunset clause, opponents worried that it would become a permanent tax.

Now, six years later, it's almost time to decide whether to renew the sales tax again, and it will be very tempting to do so.

In fact, City Manager Kurt Fritsch points out that converting the sales tax to a permanent part of the budget would allow new financial advantages such as bonding.

But Mayor Dennis Berry is correct when he contends that making the sales tax permanent will run into opposition.

"Some folks see it as a way to prevent overspending," he said at Monday night's City Council meeting.

But let's look at the numbers.

The city sales tax brings in a whopping 21 percent of the revenue McCook uses to operate, followed by 17 percent each for property taxes, electric utility transfers and federal grants.

Cutting that 21 percent will put more burden on the property tax payer, but not as much as it might seem, since the majority of property tax revenues go to support the local school system.

This year, the city sales tax paid for the city's portion of the last B Street project as well as East 11th to the tune of $111,904, air conditioning Memorial Auditorium for $31,994, and replacing the Norris Park Bandshell roof for $7,037.

Another $702,719 will go toward water and sewer improvements, future street improvements for $504,698 and West J Street construction for $156,000.

Some may quibble over the need to air condition Memorial Auditorium, but anyone who has dodged the new potholes on Norris Avenue, East H and many other streets knows that street repair is going to be a big ticket item this year.

Others argue that a city sales tax hurts local business by driving shoppers to other towns.

But where?

Buy something in McCook, and you'll pay 6.5 percent total sales tax, the same rate you'll pay in Beaver City, Cambridge, Eustis, Farnam and Oxford. The rate isn't much better in Decatur or Rawlins counties in Kansas, where it's 6.3 percent, and it's higher in Cheyenne County, where the rate is 7.3 percent.

There are still area towns without sales taxes, but even Curtis has a half-cent city sales tax, pushing the total to 6 percent on top of your purchase.

Think shopping is better in a bigger town? Perhaps, but you'll pay 7 percent sales tax in North Platte, Grand Island, Kearney, Omaha, and even Holdrege and Ogallala. And, that doesn't figure in the cost of gasoline.

McCook merchants are understandably reluctant to place more of a burden on their customers than need be. But is it unreasonable for the 40,000 people who depend on McCook for shopping and other services to help pay for some of those services?

A look at the numbers indicates that it is.

But the final decision will be up to local voters to decide in 2008.

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