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West Fargo inches toward half-cent sales tax measure for November ballot

The half-cent sales tax increase would be used for the police and fire departments, and language presented to the West Fargo City Commission on Monday left many feeling the language of the measure was unclear.

West Fargo city hall
West Fargo City Hall and police station.
Forum file photo
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WEST FARGO — The city of West Fargo took another step Monday, June 6, toward placing a half-cent sales tax on the November ballot as commissioners asked the city attorney to revise the wording of the measure.

The West Fargo City Commission is considering asking voters to approve a half-cent sales tax to be used for its police and fire departments. The city portion of sales tax would increase from 2% to 2.5% and pay for police and fire equipment, staffing and capital improvement projects, which could include new buildings.

West Fargo City Attorney John Shockley presented preliminary ballot language to the commission at its Monday meeting.

The draft of the measure would ask voters to mark yes or no to amend the city charter and enact an ordinance "providing for a two and one half percent (2.5%) sales and use tax as set forth below and published in The Forum on October 19, 2022. The amount of the sales and use tax shall not exceed two and one-half percent (2.5%) of the gross receipt."

Voters would also be asked, "Shall the City Commission of the City of West Fargo implement the above-described Charter amendment by adopting a City Sales and Use Tax by Ordinance as published in The Forum on Oct. 19 and 26, 2022, which provides for the two and one-half percent (2.5%) sales and use tax as set forth above?"

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Commissioners asked that instead of using language that discusses changing the city total sales tax rate from 2% to 2.5%, Shockley be more clear that the city is asking for a half-cent increase.

Mayor Bernie Dardis asked that Shockley be very specific with the ballot language so that voters know exactly how the revenue would be used if the sales tax is approved.

"If it's too broad, it's going to be interpreted as frivolous spending, and they're going to vote no," Dardis said. "We have to define the scope and what its intent is. We have to be honest with the public."

"We have to explain everything very well," Commissioner Mark Simmons said.

The police budget is about $10 million, and the fire department has a $3.4-million budget. In a memo to commissioners, city officials said the police department budget should increase by $2.9 million or to $12.6 million by 2026 to add personnel and equipment. Officials would also increase the fire department budget about $3.45 million to $6.8 million by 2026 to add more personnel and equipment.

The city broke ground on a new $18.5-million fire headquarters last month that will be paid for by bonds and its infrastructure fund, which is an existing city sales tax fund.

The public safety departments are primarily funded by the city's general fund, which uses property taxes. City officials said a sales tax could lessen the burden on West Fargo residents, as others from out of town would be adding to the sales tax.

Shockley said that on average, the police and fire departments combined account for about 80% of the city's general fund budget, leaving just 20% for the other 11 city departments.

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The city has a half-cent sales tax to pay for economic development projects and a one-cent tax for infrastructure projects that voters approved in 2014.

If West Fargo voters approve the half-cent sales tax, the city would have the highest tax rate in the metro. The rate of sales tax including state and county taxes in Fargo is 7.5%, and Moorhead's sales tax is 7.38%. If the measure passes, West Fargo's sales tax would be 8%.

Shockley said he will add clarifying language to the proposed ballot measure and ordinance change that will make it clear to voters what a yes or no vote will mean.

The commission did not vote on the ballot language Monday, but it will likely be returned to the commission by its second meeting in June.

The proposal will be placed on the Nov. 8 ballot.

The half-cent sales tax is expected to generate about $3.7 million in its first full year, and by 2026, it would generate about $4.3 million annually.

READ MORE FROM WEST FARGO EDITOR WENDY REUER
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Readers can reach West Fargo editor Wendy Reuer at wreuer@forumcomm.com or 701-241-5530 . Follow her on Twitter @ForumWendy .

Related Topics: WEST FARGO
As the West Fargo editor, Wendy Reuer covers all things West Fargo for The Forum and oversees the production of the weekly Pioneer.
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