Is a penny too much to pay to get Indianola’s streets repaired?
Mayor Steve Rosenthal is hoping that citizens will jump on board his newly-proposed 1 percent sales tax plan.
On Monday night, Rosenthal introduced the notion of adopting a resolution in support of creating a public/private act that would help fund road and infrastructure improvements.
The city lawmakers split on the vote 2-2, and Rosenthal ended up breaking the tie.
Alderman Ruben Woods made the motion, Alderman Marvin Elder seconded and both voted yes, and aldermen Gary Fratesi and Sam Brock voted no.
“The vote was 2 to 2 and I will vote in favor of the resolution,” Rosenthal said.
Fratesi said he was not against the resolution but wanted to table it until a later date; however, his reservation came after the vote was called.
Alderman Darrell Simpson was absent.
Rosenthal told the city lawgivers, “We’ve got roads throughout the city of Indianola that need more than just repair. They need to be completely overlaid. Water and sewer needs to be repaired underneath them, but the City of Indianola cannot afford such a repair.”
He said without this, “The best we can do is to repair streets.”
The act, which must be proposed to the state legislators by Dist. 31 Representative Otis Anthony II and Dist. 13 Senator Willie Simmons by March 15 in order to be added to the Legislative agenda and voted on for this year, would have to be approved and placed on a ballot as a bond referendum so it can be voted on by the citizens before it can be put into effect.
“So the public gets to decide do they want these roads enough to pay one penny on a dollar to have better roads,” Rosenthal said.
It would be a revenue bond and carry a smaller interest rate.
Although he has already spoken to Anthony and Simmons, Rosenthal told the aldermen that getting their approval to submit the resolution was only the first step of many.
If approved, the measure would add a one-percent sales tax to any item that is not currently taxed under the city’s tourism tax. Rosenthal said he tried to get it approved years ago, so now he is trying again.
Brock asked for clarification on the type of tax and was told that it was sales tax. Elder asked if that bond issue would conflict with any bond issues the school district may be endeavoring to impose, Rosenthal said it would not.
Rosenthal said if the city is fortunate enough to get the public and private act passed the funds would be combined with the $250,000 amount due the city based on recent legislative actions and they would go to a bank and get a lump sum on a five or ten-year payout to fix the streets.
He added that there is no federal infrastructure bill and he doesn’t expect to see one. Rosenthal said, “This is the only way to get better streets, we can’t raise property taxes enough to pay for this.”
The mayor said levying property taxes would restrict the city in how much money they are able to generate because the largest residential owners in the city do not pay property taxes, “So we have more homes in Indianola that are not generating property taxes to help fund the city in our general fund than so many of the ones that do,” Rosenthal said.
He said the penny sales tax would accrue more for the city because it encompasses a larger pool of potential contributors, which would include tourists coming into the area who spend money here.
The money derived from the act would help fund road improvements and water and sewer lines that run under those streets and the amount the city is able to generate would determine how many streets could be repaired.
Rosenthal said he doesn’t yet know what the proposed act will generate, but the state revenue department is acquiring speculative data based on last year’s sales tax minus what was generated by the tourism tax.
He reminded the aldermen that currently only 1.7 percent of the 7 cents sales tax is returned to the city; however, the city will get 100 percent of the proposed penny, less the collection fee imposed from the state.
The bond issue would not go on indefinitely.
There would be a dollar amount attached, and it would have a “sunset clause” that Rosenthal said he hopes will be in line with the amount needed.
Eventually, the city engineer and the public works director would work on a list and present that to the city fathers so they can prioritize and determine the best course of action.
Engineer Ron Cassada said they will take the list that the aldermen provided and do a cost estimate that would entail any needed water or sewer repairs “You don’t want to fix a road if the utilities are falling apart under there.”
Rosenthal said, “If we want our city roads to improve, we’ve gotta do it. There’s nobody out there that’s going to fix them for us, so we’ve got to come forward.” He said there are 168 city streets and at best they may be able to do 20, but none end-to-end
“Ultimately, if the public wants better streets they get the opportunity to vote yes or no. We’re not deciding to raise the taxes they will decide whether. They are willing to pay one penny on a dollar to do it. And I would be very much surprised if the public didn’t approve it,” said Rosenthal.
