City Administration is suggesting that we use a 0.25% sales tax increase to fund the bulk of the $128 million city obligation to DMC.
Here are the options we have to come up with $128 million (really $100 million)
- expanded tax abatement authority
- expanded TIF authority
- credit for 2012 DMC sales tax funding
- authority to extend the current 0.5% sales tax for local matching costs or authority to impose a 0.25% sales tax rate increase
- lodging tax increase
- food and beverage tax
- admissions and entertainment tax
To get to $128 million we first count the $20 million for Destination Medical Community (#3 in the list) in the 2012 Sales Tax. We also plan on using the $8 million for Downtown Masterplan Infrastructure. This leaves $100 million over the next 19 years.
#1 and #2 will be used some. It is important to realize that these funds are replaced by local property tax funds and thus costs the city property owners 100%.
#5 is not really practical we just raised it 3% for Mayo Civic Center and it is now at or near the highest in the state.
#6 is a new tax and would not generate nearly the funds we need.
#7 is a new tax and would not generate nearly the funds we need.
Many communities do have #6 and #7, but my preference would to be not to use these since they do not generate any where near $100 million. Perhaps someday these will be employed for something the community values in the future.
#4 has 2 options, but extending the 0.5% does not work. The current $139.5 million uses all these funds for most of the length of DMC. Both the timing and quantity do not do much for us. That leaves the 0.25%. Mathematically it is the only option that can raise the dollars. Not sure what other options there really are.