Dickinson considers sales tax increase measure for November ballot
During the Dickinson City Commission’s regularly scheduled meeting, City Attorney Christina Wenko provided a presentation on a proposed 1% sales tax increase and what that could mean for Dickinson residents. The commission will continue to review this proposal with the upcoming budget session.
DICKINSON — With a 6.5% sales tax in place, the City of Dickinson is looking at a proposed 1% sales tax increase and what that could mean for residents should the ordinance pass in a measure vote this November.
During Tuesday’s Dickinson City Commission meeting, City Attorney Christina Wenko provided a presentation on the proposal and highlighted the process the city would need to take to move forward, culminating in a vote by the qualified electors of the city.
With the current sales tax, 5% is allocated to the state sales tax and the other 1.5% to the city sales tax. Compared with other municipalities across the state, Wenko said Dickinson is in the “middle of the road,” with Bismarck at 1.5%, Devils Lake at 2.25% and Jamestown at 2.5%.
Mayor Scott Decker noted that 40% of the increase would be dedicated to lowering property taxes in the city, with 30% allocated for city capital projects and infrastructure and the other 30% would support community betterment projects such as the Sanford Sports Complex and Dickinson Area Public Library.
“I think the biggest thing here is we can take a chunk out of property tax with this sales tax — it’s a consumption tax. Everybody pays for it,” Decker said. “We are going to be the gateway to the Theodore Roosevelt Presidential Library. There’s going to be hundreds of thousands if not millions of people that are going to be traveling to that library. They’re going to be passing through Dickinson; they’re going to be staying in our hotels. Medora does not have the capacity. What better to pay for a lot of our expenses than those travelers and that’s why I think this is of all the taxes that we have to impose, this is one of those that will greatly help us.”
The last time the City of Dickinson attempted to impose an increase in sales taxes was in May of 2018, with a proposed rate increase of 0.5%. The measure would ultimately make the ballot in August of that year, before failing by a wide margin in the November election. Of the 8,232 votes cast, 58.35% were in opposition while 41.65% voted in favor.
How does the city change the sales tax allocation?
In order to change the sales tax allocation, Wenko noted that it will require a change in the city’s municipal code via ordinance. Being that Dickinson is a home rule city, any change in the sales tax requires a vote by the people.
There are two ways in which this ordinance can be initiated, Wenko continued. First option, which is identified within Article V of Dickinson’s Home Rule Charter, would be to have a petition signed by qualified votes of the city equal to at least 15% of the total votes cast in the city at the most recent city election. Then the petition would be submitted to a vote by the people and then the city shall certify that petition by publishing it once in the official newspaper. Within 90 days after the final certification, the city can call a special election.
If that petition passes, the Dickinson City Commission must review the ordinance with two readings before it goes to the final adoption phase, Wenko said. If adopted, the commission may not repeal or make any amendment to the ordinance for five years after the date of the election except by a 4-5 vote.
In a nutshell, whether it is initiated by petition or initiated by resolution, it ultimately goes to (the) vote of the people for them to decide whether this is going to be increased.
Once that ordinance is passed, a vote by the people is required before adoption by the Dickinson City Commission can proceed. From there, the ordinance ultimately has to go to the State Tax Commissioner’s Office for updating.
The second option would be for the board of city commissioners to initiate its own resolution.
“The resolution doesn’t pass the ordinance; the resolution is simply a resolution that indicates that this board feels it’s a priority or imperative to increase the sales tax and how it would be beneficial to the citizens of this community,” Wenko added.
This direction would still lead to an ordinance, which would require adoption via a vote by the people. If it is voted through, the ordinance would still need to come before the commission for final approval.
“In a nutshell, whether it is initiated by petition or initiated by resolution, it ultimately goes to (the) vote of the people for them to decide whether this is going to be increased,” Wenko noted.
After the vote and passage, notice must be given to the North Dakota Office of State Tax Commissioner who publishes and provides notice, Wenko said.
The North Dakota Office of State Tax Commissioner must be given notice so that the changes can go into effect the first day of the next calendar quarter. Wenko added that this change wouldn’t be immediate. For example, if said ordinance passes in the November election, it would not take effect until April or June.
The commission will continue discussions on the proposed sales tax increase with its upcoming 2023 budget review at 7:30 a.m. Thursday at City Hall.