Tax vote splits council
Decision today on money for roads that critics say poor can't afford
Argus Leader
Sioux Falls, SD
May 12, 2008
by Jonathan Ellis
The Sioux Falls City Council vote today to raise the second-penny sales tax to its maximum level promises to bring out throngs of supporters and opponents, and some councilors are predicting that the meeting will be one of the more action-packed in recent memory.
The vote could be dramatic: As of Friday, four of eight council members said they would vote against the measure, which would provide money for building roads. Three are likely to vote yes, and one - Kevin Kavanaugh - said he was undecided.
A 4-4 split would put the issue in Mayor Dave Munson's lap as a tiebreaker. His administration is proposing the increase.
That puts the microscope on Kavanaugh, who is participating in his last council meeting before leaving office May 19 because of term limits.
"I'm going to base my decision on the input I get," he said. "I'm going to do whatever I think is best for the community."
While the proposal has been in the works for several months, the timing of the vote came as a surprise to several council members who figured it wouldn't happen until later this year. But come it did, largely at the insistence of Councilor Bob Jamison, who also leaves the council May 19.
"I'm one of the guys championing it, for lack of a better term," Jamison said Friday. He said it wouldn't be fair to push the issue off to a new council.
"We ought to take care of it," he said.
Vote-and-leave irritates Staggers
Councilor Kermit Staggers, however, said it's not fair for Jamison and Kavanaugh to vote on the issue and then leave. He said it should fall to the next council.
"They're not going to be accountable for anything," he said.
Though the increase is small - amounting to only 8 cents on every $100 - it's steeped in symbolism. That symbolism isn't lost on city councilors. With gas and food prices soaring and uncertainty about the economy, some say this is not the time to raise taxes - even if it is a miniscule increase.
"No matter how big or small, the perception is it's a grab for money," said Councilor Vernon Brown. "People are feeling they have to tighten their belts."
Brown said he's received a substantial number of e-mails and phone calls on the subject.
Councilor Gerald Beninga plans to vote no.
"Fuel costs have gone up dramatically. Food prices have gone up dramatically. People's incomes have not," he said.
But supporters counter that it's so small, people won't notice. Raising the second penny from .92 percent - its current rate - to a full cent amounts to $4.16 a year on $5,200 in groceries.
It's a small amount, supporters say, but collectively it would raise almost $4 million a year. Officials in Munson's administration promise to earmark that money to building roads and upgrading existing roads. During the next five years, the city needs $81 million for roads, an estimate based on development projections.
Developer: Projects depend on money
Developer Darrel Viereck said a lot of major projects are in the works. But they can't happen if the city doesn't have the money to build roads. More development equals greater prosperity for Sioux Falls.
"Streets are a good investment," he said. "The street network is one of the greatest assets of a city so think of this as an investment, not a tax, into our infrastructure and our community."
Viereck helped broker a deal with the city's development community, a deal that took more than a year. The second penny is a minority partner in the deal. Developers have also agreed to new fees, which would generate more than $6 million a year, according to estimates.
Combined, it would give the city an extra $10 million a year for roads.
Councilor Pat Costello agrees the city needs to ramp up on road construction. But he said the money can be found in the budget without raising taxes.
"I'm reluctant to call anyone irresponsible, but I think it's ill advised and not prudent," he said.
But Jamison says there are other issues - homelessness and flood control among them - that make finding money in the existing budget difficult.
"There are some other issues out there that I think are going to be gobbling up the budget."
Jamison said the vast majority of Sioux Falls residents are fine with the proposal because he contends it will create jobs for the city.
Some of those people probably will testify today, but plenty of opponents will be on hand as well.
Cathy Brechtelsbauer, a volunteer with the anti-poverty group Bread for the World, plans to be there. She estimates that at least $1 million a year of the tax revenue would come from families that don't have extra money to spare.
"The question for City Council is: Should the city require the already- squeezed households to cough up another $1 million or more of the new tax?"
