West Fargo commissioners again delay vote on half-cent sales tax ballot question, citing language

WEST FARGO — The West Fargo City Commission held off on voting to add a half-cent sales tax measure to the November ballot Monday, June 20, in hopes the language can be simplified into one question instead of two. They will also consider adding a transaction cap to the tax.

The West Fargo City Commission will ask voters to approve raising the city sales tax a half-percent to help pay for police and fire services.

The lack of vote Monday marks the second time in recent weeks that commissioners have asked City Attorney John Shockley to revise the ballot question and clarify the language in it.

"This is a proposed increase of half a percent of the sales tax," Shockley said. "The substantive change is changing it to 2.5% from 2%."

He said the ballot language was drafted as two questions because it requires a change to the city charter, as well as a new ordinance designating the tax.

However, Commissioner Mark Simmons said two questions make the ballot confusing for voters.

"It's confusing. I think we should clear it up so it's a one question ballot," he said. "It's hard enough to get a 'yes' vote in North Dakota, period, let alone two."

Shockley said he could draft a change to the city rules to allow the ballot question to be reduced to one question in time for the November election.

The city has a one-and-a-half-cent sales tax that goes to infrastructure projects and a half-percent sales tax for economic development.

For transactions in the city of West Fargo, including county sales tax, the rate would increase from 7.5% to 8%. The city of Fargo's tax rate is 7.5%.

Fargo has a transaction cap on its city sales tax, which means the city of Fargo sales tax amount does not exceed $50 per transaction.

City Commissioner Eric Gjerdevig suggested West Fargo propose a transaction cap earlier this year when the commission first discussed adding the ballot measure. On Monday, Industrial Builders President Paul Diederich asked the city to consider adding a cap to the measure similar to Fargo's.

Diederich said West Fargo used to have a transaction cap similar to that of Fargo. However, since the last sales tax was approved by voters in 2014 and the cap was removed, his company is hit with high sales tax rates.

"Since you're proposing to increase the sales tax by another half-cent, reinstate the cap that the previous leaders promised, and make it the same as Fargo's sales tax," Diederich said.

For example, he said, on a $35,000 invoice for plywood, about $700 must be paid in city sales tax, or a $300,000 bulldozer would have sales tax of about $6,000.

To negate the high sales tax, Diederich said, his company has avoided making large purchases in West Fargo.

"I agree with you completely on the cap," Mayor Bernie Dardis said. "In my business, I did the same thing. When I'd order a half-million dollars in equipment for the casinos, I'd have them delivered to the casinos; they never came to Fargo because of the cap. I'm totally in favor of a cap."

Shockley said voters removed the cap in the last ballot measure that passed regarding sales tax. He said a disadvantage to including a cap is that there can be a delay in tax rebates. However, it would be up to the city commission if there should be a cap or if voters should be asked to approve a cap, he said.

"I don't think this is the time to do that," Simmons said.

Commissioners took no final action on the ballot measure Monday evening. Shockley said he will again return to the West Fargo City Commission with revised ballot language, at which time the commissioners may discuss adding a cap.

Readers can reach West Fargo editor Wendy Reuer at wreuer@forumcomm.com or 701-241-5530 . Follow her on Twitter @ForumWendy .