City adds use tax extension measure to August ballot
By Cameron Montemayor
Voters in St. Joseph will have a key decision to make this summer after city council members approved an ordinance on Monday to place a use tax extension proposition on the August ballot.
Council members voted 7-0 during a special meeting at City Hall on Monday to add a use tax extension proposition to the upcoming Aug. 6 ballot, a measure that has helped generate millions for street maintenance projects since 2016.
Council members Madison Davis and Andrew Trout were not present for the meeting.
First approved by voters in 2015, the tax functions by taxing items bought out of state — typically online — for use inside city limits. The existing tax is scheduled to sunset in June 2025.
The proposal put forth by the city asks voters to extend the tax at a rate of 3.875% for an additional 10 years with a sunset. The proposition will require a simple majority of votes to pass.
“The use tax itself has been a primary contributor to our street maintenance activity. So that’s going to include all of your asphalt overlay, all your asphalt mill and overlay it, plus a lot of your concrete street maintenance,” City Manager Bryan Carter said.
The new proposition spells out that the city will allocate $4 million annually in use tax revenue to go toward street maintenance, provided it generates that amount. The remaining revenue would be split up between other funds that receive retail sales tax revenue, like the general fund, parks tax fund, public safety tax fund, Capital Improvements Program fund and transit.
The tax is on pace to generate nearly $10 million for this fiscal year. Since 2016, the tax has generated just over $34 million total, or approximately $3.86 million a year for the contract street overlay program.
Use tax funds have been used to mill and overlay 423 miles of streets, or roughly 47 miles per year.
“Most of that’s been driven by use tax over the last 10 years. So all the progress you’ve seen over the last decade on street maintenance has really been driven largely by use tax,” Carter said.
The proposition states that if any city sales tax is repealed, reduced or raised during the life of the use tax, the use tax rate will also be reduced or raised by the same amount.
“So the use tax is inherently complex. So we will be getting information out that explains what the tax is and how it would be used if the extension’s granted,” Carter said.
