This was an email Mike sent to City Council and gave me permission to post;
Good Morning,
After attending the 3/3/2020 City Council Session the other night listening to many interesting debates, I want to discuss a few issues that I feel are important here.
The definition of the word Surplus is where you have excess monies available at the end of a fiscal season after all expenses have been paid out for the year.
My definition of a surplus is one of which the people spent a lot of money for the year, and ‘we’ over paid our taxes. This is the proper way to think of a surplus, not to mention, build a case that this would prove that the citizens are overly taxed, and that we could very easily afford to cut the tax rates.
Lets remember here shall we, “I” like many people, only consented to give up a portion of our sovereign property rights to the “City” in order to pool our assets as one to provide us the basic necessary services to each other. Therefore we agreed to fund Basic Government @ 1% Sales Tax in order to pay for…
– Roads/Streets, and the basic maintenance and repairs needed to maintain them thru out the year.
– Public Parks, where we the people have donated, or ceded some of our land to the city in order to provide each other cheap, fun, family activities thru out the township.
– Police Department, we agreed to fund a local police force in order to protect our properties, keeping us safe from bad men and women whom may attempt to harm us.
– Local Fire Department, in order to provide us Fire, Rescue, and Emergency Safety in order keep us safe thus protecting each other and our properties.
– Public Utilities (water, sewer, lights, electricity) in order to pool our infrastructure to help provide the basic most cheapest service possible as a community.
– Public Parking, helping to provide enough sufficient space thru out the town giving us cheap, well maintained parking spaces for FREE or at Discounted User Rates to go about our daily activities as a community of conducting business.
– Public Transportation in order to provide ourselves as a community the most cheapest service possible helping to provide us a way to commute to work, school, or to do daily activities as a community.
– Basic Government Administration in order to help manage, plan, and provide those basic services to the people.
That is all ‘we’ the people have consented to, and these costs should be as cheap and affordable as possible as to NOT over tax the people.
Now, we have placed in our ordinances the ability to raise in the short term of 2 years, the ability to borrow from the people money to invest in Land, Buildings, Infrastructure, New Roads, in order to expand the city, make our daily lives better, let alone improve upon our city. This is in fact the true purpose of our 2nd Penny Sales Tax. And this should be a temporary tax that should be used for 2 year periods, in order to NOT to place a burden on future generations. We simply give the City the ability to extend that tax up to 5 years. But as we ‘vote’ every 2 years to change our councils, the mayor, those Capital Plans change with those elections.
Thus – the 2nd Penny Tax in my opinion is a temporary tax, and should be allowed to expire when ‘we’ have raised the appropriate funds to pay for the land, new roads, new buildings, new infrastructure, etc.
The true measure of what it costs our city is the allocated expenses paid for by the 1st Penny Sales Tax. That is it.
This was the point I believe Pat Starr was attempting to make at the 3/3/2020 Council Session about the Property Tax issue. IF our Sales Tax is consistently creating huge surpluses year in and year out, and our population keeps growing every year by 3,500 people – that is an automatic $2,500,000 in new sales tax revenue every year, couple that with the Mayor restricting funds, re-financing the Bonds, the interest income that comes in from stocks, bonds, and capital, “WE” should be able to stop pulling from the Property Tax that the statutes allow us to take each year. Why do we keep keep taking more from Property Taxes, when we really do not need them.
This current ‘council’ and city administration currently believe that those property tax dollars are ours for the taking, no they are not. And there is NO mandate that we must use them. The statutes simply say, if we do not take them this year, we lose them. That is fine in my book. If we truly do NOT need them to balance our city budget, why not allow the STATE LEGISLATORS re-apportion those funds back to the people directly back to the School Districts, our Seniors, our Homeless population, our Low Income Citizens, our Children’s Lunch Programs, etc. This was the point Pat Starr was making. And I agree with him on that subject manner.
Now – I was hoping that Pat Starr and Greg Neitzert would have extended that little tax debate longer Tuesday night. They are two of the most respected city councilors, Greg and his analytic skills, and Pat with his common sense and due process. This is the DEBATE ‘we’ need to have as a community, and this is the discussion that we must force. I dont want anyone to argue, or fight. No. That is not the point, but those two are probally the best at leading this debate. Not to mention, its my most favorite topic mind you. I call for a respectful discussion in order to address this growing concern of mine –> To Much Revenue leads to an out of Control Government, and that leads to higher tax rates, more expenses, more ‘wants’.
We can very effectively cut our sales tax rates, and take less and less from property tax dollars, thus rewarding the people for their good work of Saving, Investing in our City, to spending lots of money, while helping to promote the city attracting foreigners, tourists, visitors to attend our public events, concerts, and attractions. That helps produce even more sales tax revenue.
Then there is the other Misc-Excise taxes, Imposts, and Duties that fund the Enterprise Funds, Programs, and Services offered by the city that raise their own revenues totally separate from sales and property taxes. They are self sufficient and create huge profits, which then provide us the capital needed to sustain them, invest in them, manage them. Again –> allows us to cut the Direct Taxes we call sales tax and property tax, which hurt the most vulnerable in our community.
Our effective sales tax rate is 1% – it then becomes a matter of how much ‘we’ need to borrow in the short term from the people for new roads, purchase land, new infrastructure, build new buildings, etc. Thus we create cost estimates to put forth a 2 year plan raise tax dollars from the people. That is what the Second Penny is for. And we allow the government to ‘tax’ us for up to 5 years. After we raise the necessary funds, this ‘tax’ should be allowed to expire. Until the next time ‘we’ need to raise funds in the short term.
Folks, this CITY can survive on $70,000,000 in Basic Sales Tax Funds; it can survive on the $200,000,000 it raises in Misc-Excises, Imposts, and Duties we collect to fund the activities and services of the city. We do not need to keep borrowing from bond holders, if we simply DO NOT over tax the people. We should be allowing the “citizens” to pay less in sales tax, which then allows them to invest in their own properties, spend a little extra cash, and perhaps save their money for tomorrow. “They” the citizens then become more vested in our community. Our revenue will rise in due time.
I will continue to hammer at this, lobby to lower our sales tax rate in the spirit of trying to save the citizens money. Thus rewarding them for a job well done.
In the end – we must stop over taxing people, we do NOT need anything so bad that it cannot wait 5 years until we can raise the necessary funds thru the 2nd penny. We need to be responsible, prudent, and manage our tax dollars better. We can and will lower these rates soon enough. It is just a matter of time.
I strongly encourage some thought on an ordinance that would mandate that the 2nd Penny expire every five (5) years; for no less than a term of two (2) years; placing the expiration on the same two year election cycle. This means that during a councilor’s 8 years (should anyone serve 2 terms); they would have to deal with less revenue for 2 of those 8 years in office. Not only does this help the citizens, I believe it encourages public debate, more discussion on goals, agenda, future wants and needs, thus slowing down the process of pushing items thru from 1st and 2nd Hearings. There have been a few items discussed where I felt we could have followed thru and deferred them a couple weeks. Public discussion is what we need to strive for. I do not believe this hurts the city one bit, the goal is to enforce, mandate, and encourage more public discussion on our future needs.
Our current tax revenue consists of:
- $126-130,000,000 million worth of Sales/Use Tax
- $65,000,000 worth of Property Tax dollars (optional)
- $200,000,000 estimated/projected Misc-Excises, Imposts, and Duties
- $100,000,000 in Bonds, Federal and State Loans, Grants, Budget Restraints, Bond Refinancing
Saving the Citizens $60-70,000,000 per year for a term of 2 years should NOT harm the City at anytime. This is a City that has a net position of nearly $2,000,000,000 billion dollars after all expenses, liabilities, debts, and future obligations are paid in full. That equates to writing each ‘resident’ a check in the amount of $10,000 dollars if we were to shutdown the city. That is a lot of money. Government should not create surpluses – that means the people are overly taxed.
Please, lets encourage this respectful discussion, lets fix our spending problem, our debt problem, lets be good stewards of the community. We owe it to our ancestors, and to our future generations.
*DaCola Note; While I disagree with Mike on several city issues, I think he nailed it in this post. It is getting more and more expensive to live in Sioux Falls, and the main reason is we are extremely overtaxed. I agree that the 2nd Penny should be reviewed every 5 years and adjusted. I also think property taxes should decrease instead of increasing each year.
