City Aldermen Grant County 30 Year Extension of Sales Tax Agreement

July 16, 2007
Dwayne Page

The Smithville Board of Aldermen, by a 3 to 1 vote, Monday night granted the county a thirty year extension of the sales tax agreement.

Aldermen Willie Thomas, Tonya Sullivan, and Jerry Hutchins' Sr. voted for the 30 year extension, but Alderman Steve White voted against it, preferring instead to have a shorter term agreement in the interest of city government and city taxpayers.

White suggested that Sullivan, who made the motion, had an ethical conflict of interest since she is employed as a teacher and that the school system will be receiving the benefit of this agreement. Sullivan stated that she was voting her conscience, and not for any self interest.

In a prepared statement, Sullivan said \"I am satisfied that this is in the best interest of the city, county, and the children of DeKalb County. This commitment will continue to show our concern for the children of Smithville and DeKalb County and that education is a key role to success. This is our opportunity to insure that the county and city work together to prepare for the growth and expansion of our schools. I feel that this has been a long time agreement by those leaders before us and should continue. After working with the DeKalb County Director of Schools, County Mayor, and Mayor Taft Hendrixson, I am satisfied with the efforts of long term planning that will move our schools forward with improvements on current buildings and new schools to come soon to tackle growing pains of DeKalb County Schools.\"

Thomas, in addition to being a city alderman is also a member of the county commission, another apparent conflict of interest, but Thomas stated that he too was voting his conscience on this issue.

After the vote, Mayor Taft Hendrixson called for a recess and he retired to his office downstairs. When he returned some ten minutes later and re-convened the meeting, he told the aldermen that he had considered casting a veto, but decided against it. Had he vetoed the council's vote, the aldermen would have needed four votes to override the veto.

However Mayor Hendrixson said he felt a 30 year agreement with the county was much too long, and that at some point in the future, city property taxpayers will pay for it, through higher taxes. Hendrixson said he favored a ten year agreement.

Since 1968, the City of Smithville, by agreement with the county, has given two thirds of it's local option sales tax collections to the county's education local purpose tax fund to help pay for construction and other school capital outlay projects.

But after the local option sales tax increase was approved by county voters in the May referendum, city officials expressed a desire to place a termination date on the agreement, which for almost 40 years, has been an \"open agreement\" with no ending date on it.

The city is legally obligated to turn over to the county 50% of it's local option sales tax collections for education purposes, but since 1968, the city has been contributing 16 2/3% more than it's share for a total of 66 and 2/3%.

County officials want to keep it that way, but city leaders, before the city election, said they were opposed to signing any extended long term agreement giving the county two thirds of the city's sales tax collections, because Smithville, in spite of a large general fund surplus now, might need that extra money in years to come for needs that are, as of now, unforeseen.

Steve Bates, the county's financial advisor, warned city leaders in June that the county could not do any long range planning with only a short term commitment from the city. He says new schools will have to be built in the coming years and the county must count on that extra sales tax revenue coming in from the city to support such projects. He said the county's bond rating would also be affected.

County Mayor Foster said in June that even by turning over two thirds of it's sales tax collections to the county, the city would still gain about $361,000 every year, plus growth, whereas the county, during the first three or four years, would not gain because of the reduction in the property tax rate, as promised to the voters.

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