Dayton Puts Sales Tax Increase Before Voters

DAYTON – The city of Dayton will ask for voter approval of a sales and use tax increase this February to help maintain city streets. The increase would raise sales tax by two-tenths of 1 percent, or 20 cents for every $100 spent on taxable items in Dayton.

The special election ballots will go out to voters on Jan. 23, and voting will be completed on Feb. 10. A simple majority, or at least 50 percent, voter approval is required for the measure to pass. This will be the only item on ballots.

What does that mean for shoppers? Sales tax would be 8.3 percent rather than the current 8.1 percent. The change would take effect mid-summer, according to City Clerk Trina Cole.

"The intention is to do street improvements," Cole said. "We also hope to do a massive chip seal project and potentially create a sidewalk program like they have in Waitsburg, where the city and residents share the cost to improve and maintain sidewalks."

The state allows local governments to create Transportation Benefit Districts as a way to maintain local streets, since several statewide initiatives have now removed crucial sources of revenue used to help fund such projects in the past, according to a pamphlet provided at city hall.

Districts are designed to create a specific boundary wherein a revenue source is captured, and that money is legally required to be used for transportation purposes, such as city streets, and nothing else, according to the pamphlet. The boundaries of Dayton's Transportation Benefit District are identical to its city limits.

Money from this increase in sales and use tax would not be available to the city until the end of this year, meaning citizens aren't likely to see any direct results until 2016, Cole said. But with an estimated $7.7 million in street maintenance and reconstruction needed in Dayton, not including any potential work to upgrade underground utilities or to add sidewalks, the tax increase could be a big help.

Reconstruction, overlay and sidewalk projects are costly, but funding from a benefit district may allow the city to use some of that funding to further leverage additional state and federal grant revenue, Cole said.

The money will also be used for needed street maintenance, which will help prevent more streets from requiring full-scale, costly reconstruction later. About 12.8 percent of the city's 20.2 miles of street lanes are in need of full reconstruction, mostly due to lack of funding for maintenance projects, according to the city's pamphlet on the tax increase.

The city has information on the tax increase available at city hall.

Sales and Use Tax Details:

With the current revenue stream, two-tenths of 1% will generate approximately $69,000 annually to address Dayton's unmet transportation needs.

For every $1 spent on taxable items, 2 cents in new revenue is generated. For every $100 spent on taxable items, 20 cents would be generated from sales tax increase.

The sales tax would be paid by everyone who shops in Dayton and uses Dayton's streets and services, not just Dayton residents.

State law allows the tax to be in place for 10 years. If the city were to sell bonds to pay for a project, the tax may remain in place until the bonds are paid off. Bonds generally are paid off between 10 and 20 years.