The capital improvements tax pays for sidewalks, roads and buildings.
Although the city’s quarter-cent sales tax for capital improvements won’t expire for nearly two years, city staff and the Columbia City Council are gearing up to ask voters to extend it and perhaps to make half of it permanent.
The sales tax, which will raise a projected $3.91 million for the city this fiscal year, is scheduled to expire Dec. 31, 2005. Proceeds of the tax cover major capital expenses such as street and sidewalk construction, new buildings, fire trucks and other public safety equipment.
Several park-related projects, including much of the MKT Nature/Fitness Trail, have been funded over the years by the capital improvements tax. Voters, however, have since passed a special quarter-cent sales tax earmarked specifically for parks.
At a council work session last week, City Manager Ray Beck suggested the council consider placing a proposed extension of the tax before voters within the next 18 months. Potential election dates include the August primary election, the November general election, the special election in February 2005 or April 2005. To place the extension on the August ballot would require the council to pass an ordinance in May.
Beck and City Finance Director Lori Fleming also floated the idea of asking voters for a permanent one-eighth-cent sales tax for capital improvements. The city has traditionally asked voters every five years to extend the quarter-cent tax and presented a list of projects for which the money would be used.
The permanent one-eighth-cent tax would replace half of the current quarter-cent tax, leaving the overall tax rate the same, at a quarter-cent.
Beck asked the council to consider the sales-tax ballot issue after he submitted a list of major street projects that are on the horizon. The list included millions of dollars worth of projects, including some that will receive some funding from other sources. Projects on the list included a new interchange at Gans Road and U.S. 63 at a cost of $8.5 million and the extension of Gans Road to Providence Road at a cost of $12 million.
Beck wants council members to review the list and add projects they feel are important. He noted that while the city has a half-cent sales tax for transportation, much of it is spent to operate the Columbia Transit System and Columbia Regional Airport.
Beck said the council could also look into selling bonds or increasing development fees to help fund road projects. Council members said they’d like to hire a financial consultant to evaluate the balance in spending between new projects and improvements to existing roads.
Sales taxes have long been a major source of funding for Columbia city government. They are projected to raise a total of about $32 million this year alone.