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Dave Olson, Published March 25 2010

Cass County, Fargo mull half-cent sales tax to help pay for diversion

Now that local governments have decided which flood diversion option they prefer for the Fargo-Moorhead area, the looming question becomes how to pay for it.

Fargo and Cass County officials said Wednesday that they are exploring the idea of a new half-cent sales tax to help cover the local share of a diversion, but they stressed much discussion must occur before any plan is put before voters.

It was unclear which jurisdiction might bring a tax plan forward.

Fargo voters approved a half-cent sales tax last year that will raise $200 million for flood control projects.

Mayor Dennis Walaker said city officials are considering asking for another half-cent tax, but he said before that happens they need to know how much the states of North Dakota and Minnesota will contribute to a diversion.

Local officials want an estimated $1.3 billion North Dakota channel that would carry 35,000 cubic feet of water per second.

The U.S. Army Corps of Engineers has said it is willing to continue studying that option in addition to a smaller Minnesota diversion the corps feels is the best choice from a national perspective.

Federal officials have said they will contribute about $565 million toward a project and it’s possible the amount could rise.

To pay their share of a North Dakota diversion, Walaker said local jurisdictions are looking at a

“$650 million to $750 million nut to crack.”

Cass County officials said Wednesday that they are exploring the potential for a half-cent county sales tax, and are willing to talk with Fargo officials about which jurisdiction would ultimately bring a tax forward as a way to help pay for a diversion.

“We know we have to get it funded, period,” Cass County Commissioner Scott Wagner said, adding that any funding plan would likely include a blend of sources, from sales taxes to special assessments.

Wagner said that of the

7 percent total sales tax charged in Fargo, 2 percent comes from city sales taxes.

With one of the city’s half-cent sales taxes expiring in 2012, Wagner said it might be an opportune time to talk about replacing it with a sales tax addressing flood control.

Walaker said for voters to support another half-cent sales tax, they need to know how much other jurisdictions will chip in and where the money will go.

He said if Minnesota provides $150 million toward a diversion and another

$50 million to mitigate impacts on downstream communities, the project will have a better chance of moving forward.

Officials said it is too early to say when a sales tax question might be placed on a city or county ballot. However, Walaker said the sooner after the 2010 flood the better as the need for flood control will be fresh in people’s minds.

Cass County imposed a sales tax in the early 2000s that was dedicated to paying for a new county jail.

Voters authorized the tax for four years, but it was suspended after about 3½ because enough money was raised to cover costs, said County Auditor Mike Montplaisir.

Readers can reach Forum reporter Dave Olson at (701) 241-5555