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Published June 09 2012

Fargo Measure 1 pits priorities vs. language

FARGO – Neither supporters nor opponents of a city measure to extend Fargo’s half-cent sales tax are placing any bets on how Tuesday’s vote will turn out.

The tax, which expires this month, was established in 1992 for street and sewer projects. Voters extended it in 2002 to also pay for permanent flood protection projects.

Earlier this year, Fargo Mayor Dennis Walaker proposed extending the tax for 20 years to help pay for an umbrella of priorities: streets, sewer and water infrastructure, and internal flood protection.

In explaining the need for the sales tax extension, city planners and engineers presented an array of projects the revenue could help fund:

• $247 million worth of internal flood protection by 2016.

• $36 million worth of planned street construction projects, plus another $65 million in other work that could be done by 2028.

• $322 million worth of projects to upgrade or maintain the city’s water and sewer infrastructure over the next 20 years.

In late March, city commissioners voted 3-2 to put the measure on the June 12 ballot.

Walaker and Commissioners Brad Wimmer and Tim Mahoney favor extending the tax, while Commissioners Mike Williams and Dave Piepkorn oppose the extension.

The measure needs 60 percent approval to pass. If it’s adopted, the half-cent sales tax would return Jan. 1 and last through 2032.

A half-cent sales tax is expected to generate at least $11 million a year and is estimated to cost the average household about $56 a year.

With the city’s growth, that tax revenue could climb to $22 million a year by 2031, resulting in a total income of $312 million over the life of the 20-year tax.

Walaker has been among the most prominent cheerleaders for the extension, although key city officials and community members have also been on board.

“The sales tax issue is much, much more important than any single issue,” Walaker said. “This is about paying for an extraordinary expense. This is not normal running of the city.”

A group of anonymous Fargo residents and businesses have also rallied together to support the sales tax extension.

The “Protect Fargo Committee” formed in mid-May, led by its chairman, Cole Carley, outgoing CEO of the Fargo-Moorhead Convention and Visitors Bureau.

In online campaign videos, Carley and Walaker tout the progress Fargo leaders have made in infrastructure improvements and flood protection since the half-cent tax was established in 1992.

They urge Fargo voters to pass the sales tax extension so the city can continue to fund its priorities.

No group has formed in official opposition to Fargo’s Measure 1.

Commissioner Williams, who is seeking his third term Tuesday, said Fargo receives plenty of tax revenue from other sources to pay for the city’s $247 million goal of shoring up internal flood protection by 2016.

With or without the sales tax extension, Fargo would still have revenue from 1½ cents worth of city sales tax that generates $33 million a year.

That, coupled with at least $7 million a year of state sales tax revenue, is enough to pay for Fargo’s various projects, Williams said.

He added that a sales tax extension could eventually be necessary to help pay for the Red River diversion, but since the project’s future depends on congressional funding, Williams said it’s too early to ask voters for more money to fund it.

“We’re always better off with more information and a well-defined project that defines what the money is for,” Williams said.

Williams and Piepkorn also take issue with the ballot language, calling it too vague and saying city leaders aren’t direct about the projected revenue’s purpose.

The measure states the 20-year half-cent tax will “be utilized by the City of Fargo for such infrastructure improvements including flood protection as the governing body of the city may select.”

“They’ve been changing what they think they need it for,” Williams said. “First, it was for the diversion, then it was for flood protection, and then it was for continued expansion of infrastructure.”

Piepkorn, who is also up for re-election this year, expressed similar frustrations in a recent letter to the editor in which he urged Forum readers to vote “no” on the measure.

“When the sales tax increase was first proposed, the argument was made that we needed the money for infrastructure work,” Piepkorn wrote. “That argument did not sell, and now the pitch has changed and we need it to protect Fargo against a 100-year flood.”

“The language on the ballot is vague and places few limits on how the revenue can be spent,” he added.

Piepkorn also highlights a potential positive the city might see if voters choose not to extend the sales tax.

Shoppers would see a minor tax cut, and “a lower Fargo sales tax rate will help generate even more business, which, in turn, means more sales tax revenue for the city,” Piepkorn said.


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Readers can reach Forum reporter Kristen Daum at (701) 241-5541