County Board hears sales tax pitch

by Emmitt B. Feldner
of The Review staff

SHEBOYGAN – The County Board got a sales tax pitch Tuesday from a potential benefactor and a chief proponent.

They also heard a plea not to adopt the half-percent sales tax from one citizen a month before the board is expected to take final action on the proposal.

County Administrator Adam Payne and Transportation Director Greg Schnell made a powerpoint presentation to the board on the proposed tax, a major portion of which would be dedicated to road maintenance and upkeep projects.

Payne said the county is falling behind in keeping up with road maintenance and repair and needs extra revenue to meet those needs.

“If we continue to allow this, we are all going to pay dearly for it,” Payne said of failing to keep up with necessary road work.

But Sheboygan Falls resident Jay Hoogstra suggested that a sales tax is not the right approach.

“Find a different way to do it other than the sales tax,” Hoogstra said in a public address to the board.

“The half-percent sales tax is not the way to go,” he stated. “Let’s do this the honest way, go through the property tax.”

Hoogstra noted that the county has a $64 million reserve fund and suggested, “maybe we have to take a look at that.”

But Payne countered that the county needs to maintain a healthy reserve to maintain its strong bond rating and as a needed rainy day fund.

Along with the fund balance, Payne noted that several other alternatives have been suggested to free up funds for road work – borrowing or cutting other programs and services.

Referring to cuts in programs and services, he pointed out that more than two-thirds of the county’s property tax levy goes to two areas – public safety (Sheriff’s Department) and Health and Human Services.

Payne told supervisors that, if they are told by constituents to cut programs or services to raise money for road needs, “Ask them, ‘What would you like to cut? What do you have in mind?’”

He also cited the number of cuts, consolidations and cost containments the board and the county have enacted over the last 15 years.

That included, he noted, a 38 percent reduction in staffing since 2003 and a total county payroll that is less today than in 2003.

As for borrowing, Payne said that would add to the county’s debt and the annual debt service payments, in turn increasing the property tax levy.

“This proposal will provide property tax relief,” Payne said of the half-percent sales tax. “There is going to be significant savings by reducing our borrowing.”

Using sales tax revenue for road maintenance, equipment purchases and other Highway Department needs the county could reduce its debt service from $5.5 million a year to $2.5 million a year, Payne said.

In addition, at least $1 million of the projected $9.5 million in sales tax revenue in 2017 would be applied to reducing the property tax levy under the proposal, Payne pointed out.

The proposal also calls for sharing $1.5 million of the sales tax proceeds with the county’s cities, villages and towns for them to use for road and transportation purposes.

“No other county has done this,” Payne said of the revenue sharing proposal.

In his presentation, Schnell told the board that the county maintains 450 miles of county roads, the fifth-largest number of any county in the state.

With a 15-year life expectancy for asphalt road overlay, the county needs to pave 30 miles of road a year to meet adequate standards. But the county has only been able to afford an average of 18 miles of road per year over the last five years.

Without the asphalt overlay, Schnell said, roads continue to deteriorate and the maintenance costs increase.

At current prices, according to Schnell, a mile of asphalt overlay costs $120,000. Pulverizing and repaving a mile of road costs $250,000, while a complete reconstruction costs $1.2 million per mile.

Schnell also pointed out that the county is responsible for maintenance of 73 bridges in the county, 85 percent of which were built before 1948.

He went on to say that 20 bridges in the county have a sufficiency rating of less than 50 percent.

“The last four bridges we built in the county cost an average of $421,070,” Schnell said.

“We are not an extravagant group of people,” Schnell emphasized.

Payne noted that projections are that tourists would pay approximately 18 percent of the total county sales tax.

As for the remaining $7.8 mil- lion, Payne said, that would equal $67.53 per person on average for county residents.

“I imagine that a lot of you are not very enthusiastic about being on the board that implements a county sales tax. But we’ve worked hard on this. I think it’s the right move and I think it’s the right time,” Payne concluded.

The ordinance enacting the tax was referred to a joint meeting of the Executive and Finance committees, to be reported back to the board for final action at their July 19 meeting.

The board turned down a motion by Supervisor Mark Winkel to refer it to the Finance Committee alone.

Readers Comments

Perhaps the county should
Submitted by plexyoung (not verified) on Fri, 2016-07-01 11:44.
Perhaps the county should stay out of debt before considering raising taxes. How much interest is being paid on debt? Vs. how much interest is being earned by money sitting in the bank? Perhaps Mr. Payne did not need a large recent pay increase if the county needs money so badly.
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