The idea of using city sales tax to fund Fargo schools will be a tough sell to city commissioners, judging by their comments Wednesday.
Mayor Bruce Furness said he opposes the idea because 40 percent to 50 percent of the city's sales tax collections come from non-Fargo residents.
"I think it's inherently unfair for us to ask all of our neighbors to fund our education with the sales tax," he said.
During Tuesday's Fargo School Board meeting, a group of citizens led by former Gov. George Sinner pitched the notion of using a half-cent sales tax to reduce the school district's burden on Fargo property tax payers.
The half-cent sales tax would replace the existing 18-month library sales tax when it expires in June.
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Furness also plans to ask the City Commission to place a 1-cent sales tax on the June ballot, and he doesn't want to confuse voters with a second sales tax measure.
The 1-cent infrastructure tax would extend the half-cent Fargodome sales tax, set to expire in December 2008, and the half-cent street tax, set to expire in June 2012.
The tax revenue would pay for $240 million in infrastructure needs over the next 24 years, from water distribution lines and towers to an underground water storage facility in south Fargo, Furness said.
"We need to know now that we'd have the sales tax to start the implementation of that," he said.
Alex Macdonald, one of about a dozen people who proposed the school tax, said he believes the infrastructure tax could wait until a later ballot.
He also noted that the Fargo School District returns a portion of its mill levy for redistribution to other school districts.
Other city commissioners raised similar concerns about a sales tax for schools.
Linda Coates said she's troubled by the idea of asking surrounding communities to pay for Fargo schools. Dr. Tim Mahoney echoed the mayor's concerns about a school tax clashing with infrastructure needs.
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Mike Williams and John Cosgriff both questioned whether the sales tax would make a big enough impact on property tax statements.
A $100,000 home owner in the Fargo School District will pay $2,163 in property taxes this year, according to the Cass County auditor's office.
The school district's portion of that bill is $1,433. If a half-cent sales tax reduced the district's levy by 40 mills as projected, that amount would drop to $1,254 - a savings of $179 per year, or about $15 per month.
"It's not even as much as your phone bill," Williams said.
Macdonald said he realizes the tax wouldn't make a major difference.
"I think it's a foot in the door to get some people thinking about how we can fund the school systems," he said.
Nine school districts are currently suing the state over its education funding formula, arguing it relies too much on property taxes and places an unfair burden on districts with little valuable real estate.
Williams said that while he doesn't approve of a sales tax just for Fargo schools, he believes the state should diversity education funding with income tax and a statewide dedicated sales tax.
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Cosgriff said Fargo also must be careful not to raise sales tax to the point that it drives shoppers elsewhere.
Earlier this month, Attorney General Wayne Stenehjem ruled that a city may grant sales tax revenue to a school district as long as the city's charter and ordinances authorize it.
The school sales tax could be referred to the June ballot by the City Commission or through a petition containing at least 1,880 signatures, or 15 percent of voters in the last mayoral election, City Attorney Garylle Stewart said.
Because it requires an amendment to the city's Home Rule Charter, the tax would need a supermajority of 60 percent voter approval.
The City Commission and School Board also would have to create a joint powers agreement allowing the city to collect sales tax on the school district's behalf, Stewart said.
"I can't believe that if the voters decided that this was a good course of action that that would not be accomplished," Macdonald said.
Readers can reach Forum reporter Mike Nowatzki at (701) 241-5528
