Sales tax collections beating anticipated numbers

Sales tax collections from the new half percent tax that Sidney voters approved in July 2013 are coming in at a rate that seems higher than expected.

Although the city predicted that yearly revenue over the 10 years that the sales tax will be collected would average $1 million per year, the city thought the tax would bring in a lower amount for first few years.

After tracking the first five months of revenue, city manager Gary Person now believes the city will reach the $1 million per year mark sooner than expected.

“The thing with sales tax is, to me, it’s the fairest form of taxation there is because everybody pays a little bit,” Person said.

Many travelers visit Sidney, due to companies working with outside vendors and the many hotels in town. These visitors bring revenue to the city, but they also expect certain services from the city, such as police and fire protection and well kept streets.

“Sales tax allows for them to help pay for some of those services and not put the total burden on the local folks,” Person said.

Although some critics are very vocal about not raising taxes, the city has taken four sales tax initiatives to the public for a vote and every time the voters approved them.

“Good for them,” Person said. “They saw the value in it.”

All of the funds the city collects from the new tax are allocated to various projects: 50 percent for street improvements, 30 percent for a new swimming pool, 12 percent to the irrigation system and other improvements at Hillside Golf Course, 5 percent to storm water mitigation projects and 3 percent to the parks department.

The city chose the breakdown of funds from the new tax for many reasons. It continually hears concerns about needs for street improvements and is also aware that new streets will need to be constructed to accommodate growth.

The golf course irrigation and improvement project is currently around 50 percent complete. The two subcontractors doing the work will start construction again soon. They must have work completed by June 14, although the city hopes work will be finished before that time.

“It will fix a lot of the problems that were up there,” Person said.

This work will relieve many maintenance issues the course experienced, and for which the city had to expend funds.

“What we tried to do is make the sales tax thing something for everybody, that everybody could see a little value in it,” Person said.

Although some of the money from the new tax is set aside for storm water management, Person expects that the city will have to take out a low interest loan to complete some major projects in the east Sidney development and pay for those over time.