Report outlines road tax

Consultants say road funds can come from raising sales taxes and adding taxes to new homes.
Friday, November 12, 2004 | 12:00 a.m. CST; updated 10:55 a.m. CDT, Friday, July 18, 2008

A current lack of funding for the city’s Major Thoroughfare Plan could mean an increase in the capital improvement sales tax as well as the application of an excise tax on future homes built along the city’s edge. That was the preliminary recommendation of a team of consultants hired by the city during the summer to develop the city’s transportation financing strategy.

Committee recommends tax increase

In a Tuesday evening presentation to a 16-member citizens’ advisory committee and three members of the public, the consulting team of Stinson Morrison Hecker, TranSystems Corporations and Development Strategies suggested that the city increase the capital improvement sales tax from a ¼ cent to a ½ cent. Such an increase, they said, would provide an extra $6.3 million for city-wide road improvements.

The team also recommended that the city begin financing future growth by imposing an excise tax of $3,860 on each new home built along the outskirts of the city. An excise tax is a tax levied on a particular activity.

Looking to the future

According to an existing-conditions report presented to the city in October, the city’s Major Thoroughfare Plan will entail nearly $428 million worth of road improvements between now and 2030. It is estimated that the city needs to begin spending some $19 million per year in order to cover its rising transportation costs. Currently, the city is spending only $9.2 million per year.

Possible consequences of increased taxes

Although most members of the advisory committee seemed to recognize the need for some source of additional funding, there still was not a consensus on the rate by which the capital improvement sales tax should be raised. Some members also expressed concern that too high of an excise tax would stifle new home purchases as well as unduly burden new residents with the costs of paying for the city’s growth.

The outcome lies in the hands of voters

The team hopes to finalize its recommendations by Nov. 22 and will meet again Tuesday before issuing its formal report to city officials. The city plans to have three public hearings before proposing the initiative for the April 2005 ballot.

Voters would have to approve both tax measures before they could be put into effect.

The consulting team’s report is available on the city’s Web site, at

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