The city of Gardner will seek to reinstate a half cent sales tax before the end of the year.
During a May 18 work session, council members appeared to reach a consensus to seek a sales tax increase from voters in a mail ballot election sometime in September. The sales tax would replace a 10-year, half cent sales tax that funded debt on Celebration Park and the Gardner Aquatic Center. That tax is set to sunset on Dec. 31.
The new tax, if approved by voters, would be used to fund street maintenance and repair of pedestrian bridges.
City officials estimate the tax would raise approximately $10 million, or about $1 million annually, before it sunset in 10 years.
Because the assessed value of real property increased last year, the city of Gardner will also raise revenue through property taxes.
However, Cheryl Harrison-Lee said even with the additional revenues, it is not enough to fund needed street maintenance on the city’s more than 155 lane miles.
“We just don’t have enough revenue for our projects,” Harrison-Lee told the council. “…Without new funding we’re only likely to sustain (Capital Improvement Project) maintenance projects.”
The city isn’t in a position to wait on its street maintenance funding. Harrison-Lee said 79 percent of the city’s streets are in good or satisfactory condition, however, too many of the roads – two-thirds – will need replacing at the same time. By 2025, 86 percent of the streets will be in fair or poor condition.
Harrison-Lee said it costs five-times more to fix poor roads than it does to maintain good or satisfactory roads.
“We’re actually on the verge of diminishing returns,” she said. “If we can’t fund (road maintenance) at a dollar, to spend five times that is probably not a realistic expectation.”
The Walmart Tax Increment Financing, or TIF, is also set to expire this year. The financing required that sales tax and property taxes from the Walmart be used for infrastructure related to the construction of the Walmart and the surrounding properties. However, Harrison-Lee told council members that additional revenue, approximately $800,000 annually, will not cover the costs of road maintenance needs.
Through a pavement assessment study, council recently learned it will cost approximately $6.6 million over the next 10 years to reconstruct and preserve neighborhood streets in Gardner.
Officials also estimate that reconstructing pedestrian trails and bridges would require another $1.1 million.
Council members briefly considered requesting a higher sales tax rate – up to three-quarters of a cent – in order to assist in the possible funding of a new police or justice center. A consultant told council members earlier this year that a new justice center would likely cost the city $13.2 million over the course of 20 years.
Council members Lee Moore, Steve Shute and Todd Winters appeared to briefly flirt with the idea of seeking voter approval of a three-quarter cent sales tax.
The additional quarter cent would not garner enough revenues to fund a new police building. Nor would it garner enough to fund new public works and parks and recreation facilities, which council members have on their list of anticipated needs.
Also, council members worried that voters may be reluctant to approve the added sales tax.
“I’d rather have the $1 million than nothing,” council member Todd Winters said. “Taking this to the public, we’d have to have a lot of education. My concern would be there would be a negative feedback if we went up to three-quarters (cent) as opposed to the half.”
Voters must approve the half cent sales tax. City attorney Ryan Denk told council members they could do a live polling election or a mail-in ballot election. Both would cost between $35,000 and $45,000. To meet statutory requirements before the current half-cent sales tax expires, Denk said council would need to act quickly to set a September election in place.
Council member Steve Shute said even with a half cent sales tax, the city may need to look at other additional revenue in the future. He said there’s clearly a need to replace pedestrian bridges on city trails and to maintain streets.
“I would rather deal with a sales tax than with a property tax. (A sales tax) is spread out to more people, because it’s not all on property owners. We’re still going to have to look at additional revenue sources,” Shute said. “We have needs here than go beyond the half cent.”
Council members will vote on a resolution to seek a sales tax increase during a June city council meeting.
The resolution must name the date of the election, the purpose of the sales tax, the sales tax rate increase and the date the tax will begin being collected.
City council to seek approval for half cent sales tax increase