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Published October 20, 2010, 12:00 AM

Data shows cost of proposed flood sales tax on individual households

Opponents of a Nov. 2 measure to instill a half-cent sales tax for flood mitigation have suggested such a tax will cost consumers more over the life of the tax.

By: Wendy Reuer, INFORUM

Opponents of a Nov. 2 measure to instill a half-cent sales tax for flood mitigation have suggested such a tax will cost consumers more over the life of the tax.

But, at the second of four public information meetings regarding the sales tax Tuesday night, officials provided data regarding what the half-cent can mean to individual households in Cass County.

The half-cent sales tax will be used to raise $220 million for the local share of the North Dakota flood diversion project.

County Commissioner Scott Wagner said a current study was not done. However, a 2008 study done by an independent agency, Impact Data Source of Austin, Texas, examined the economic impact of a half-cent sales tax on Cass County residents.

According to the study, in 2007, there were 57,809 households in Cass County with a median income of $46,060. Those with a median household income of $46,000 would pay about $44 per year in taxes on consumer goods.

Wagner said taking inflation into account, a median income of $50,000 may be more accurate for 2010, which would cost households about $48 per year in sales tax.

With a half-cent sales tax, one consumer would have to buy $40,000 worth of consumer goods to generate $200 in taxes. Those consumer goods do not include houses, automobiles or food.

“Your home is not taxed with a sales tax. A car is not taxed with a sales tax. Food is not taxed,” Wagner said. “It’s clothing, electronics, consumer goods that are taxed.”

The county estimates that at least a third of consumers are not residents of Cass County but would contribute to the fund by shopping in Cass County.

Jon Lindgren, former Fargo mayor and co-chair of the No Blind Tax Committee said using that math, it still can cost the average household nearly $1,000 over the life of the proposed 20-year sales tax.

Officials at the meeting attempted to comment on criticisms that have been voiced by those who oppose the tax.

Cass County Auditor Mike Montplaisir addressed the language of the ballot, stressing funds will only be used for flood mitigation.

Walaker said he supports this measure for three reasons, with No. 1 being that flooding impact is not confined to Fargo.

“The diversion is in Cass County. It’s not in Fargo – simple, very simple,” Walaker said.

West Fargo Mayor Rich Mattern added that what happens in Fargo affects West Fargo residents also.

“More than 63 percent of our working population works in Fargo. I think we’re all in this together,” he said.

Walaker added that if the design is finished and under way before a local funding source is determined that can match the shares of state and federal money, the county or city may have to borrow money and skyrocketing flood insurance rates could become an issue.


Readers can reach Forum reporter Wendy Reuer at (701) 241-5530

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