City to put tax question to voters

The City of Clarendon is asking voters to consider a change in the way local sales taxes are distributed when they go to the polls this May.

Local businesses collect an 8.25 percent sales taxes. That overall number won’t change no matter which way citizens vote, but the local allocation of those taxes could change.

Of the sales tax rate, 6.25 percent goes to the state and currently 1.0 percent goes to the city’s general revenue, 0.5 percent goes to economic development, and 0.5 percent goes toward property tax reduction.

If citizens vote for the ballot initiative, the 0.5 percent currently allocated for property tax reduction will be redirected with 0.25 percent going to the general fund and 0.25 being dedicated for street repairs.

The property tax reduction sales tax revenue, which amounts to about $100,000 per year, results in lowering the city’s ad valorem rate by about 20 cents per $100.

Earlier this year, the city council abolished the city’s tax on personal property, such as cars, trucks, boats, etc. That savings for residents will show up on next year’s property tax bill along with a significant reduction expected in the city’s overall property tax rate. Tax notes and certificates of obligation that were paid off earlier this year will cause the property tax rate to drop by about 28 cents per $100.

It’s that lower rate and the death of the personal property tax that city leaders hope citizens will consider when they go to the ballot box. If voters approve the measure, the city’s net ad valorem tax rate will be about eight cents lower than it currently is, and the city would collect about $50,000 annually from the street maintenance sales tax.

That maintenance tax can only be spent to repair existing streets and sidewalks and will have to be reauthorized by city voters every three years.

City Administrator David Dockery says that $50,000 will be dedicated over and above the city’s current street maintenance budget.

“It will simply mean more dedicated funds for street maintenance and repairs,” Dockery said.
Early voting begins April 22 at the Courthouse Annex and will continue through April 30. Election Day will be Saturday, May 4, 2019.