Posted 5/24/16 (Tue)
By Carrie Sandstrom
A local economic development fund that has poured more than $2.5 million back into the Crosby community will be up for city vote June 14.
In 1992, Crosby established a home-rule charter and levied a 1 percent local sales tax, referred to as the Spirit Fund. The money brought in by this tax is used to give monetary incentives to businesses that want to expand or locate in Crosby or Crosby’s trade area.
“At the time it was first passed, we were one of the few communities that had considered it,” Crosby Mayor Bert Anderson said. “At that time the hospital was involved to receive part of the proceeds, as well. It was to be used to help the hospital out and city infrastructure.”
But now, more than 20 years later, the fund has morphed, providing loans and grants geared toward economic development and businesses, along with enhancement grants meant to “create, improve and strengthen the quality of life” in the area.
In 2013, the hospital gained approval from voters to receive its own 1 percent sales tax, ensuring it receives a set amount of money, instead of having to file requests from the Spirit Fund. The previous November, the park board won its own 1 percent sale tax. The three taxes have resulted in a total 3 percent sales tax -- one of the highest local sale taxes in the state.
However, another nearby town, Tioga, has an even higher local rate -- 3.5 percent.
Despite the cost, Community Development Director KayCee Lindsey, who receives half her salary from the Spirit Fund, says revenue from the tax has been beneficial to the community.
“I think it’s making an enormous difference in the community,” Lindsey said. “It’s an overall sales tax that’s really benefitted the overall county. Since 2000 there’s been close to $2.5 million worth of investments coming back into the community.”
Incumbent City Council member Troy Vassen says failure to continue the Spirit Fund, and through the Spirit Fund maintain Lindsey’s job, would negatively impact the city.
“That position handles so much stuff in our community,” by interfacing with virtually every other public board and organization in town, Vassen said. “Everything it does, it would take another city employee (to do) if she were not there.”
However, others are not as sold on the continued benefits of the tax, including city council candidate Steve Dhuyvetter, who says the taxes have veered from their initial goal and deter people from spending their money in the city.
“I was dead set against any of the sales taxes,” Dhuyvetter said.
“The first one was supposed to be for economic development – all of a sudden it didn’t turn out to be economic development.
“There’s a lot of people from right here who don’t shop in town because we have a 3 percent sales tax,” Dhuyvetter said, though he thinks support for a new daycare center is money well spent from the Spirit Fund.
Incumbent City Council member Wayne Benter, who serves on the Spirit Fund Board, which decides how revenue from the tax should be doled out, says he supports the continuation of the tax. According to Benter, the tax adds to what the city can do when it comes to promoting the community and attracting businesses.
“I realize it hurts us that we’ve got two more cents on top of the city one,” Benter said. “But if anyone should have a one cent tax it should be the city.”
Candidate for City Council Denise Johnson says she supports the tax, although she acknowledges the issue has two sides.
“I like what it does but it’s also hard to believe that small town Crosby, North Dakota, has one of the highest sales taxes and I don’t like that everyone always has to pay that,” Johnson said, adding that the city’s smaller population might necessitate a higher tax than in a larger community where funding comes from more people and businesses.
Lindsey says there’s a lot at stake if the Spirit Fund tax isn’t continued.
“I fear that if it doesn’t pass, once we start losing businesses in town we won’t regain those businesses,” Lindsey said. “Once it’s gone, it’s gone. It’s very hard to get back . . . I’ve had colleagues come up from other parts of the state and say, ‘You have such a great Main Street, you have such a great business sector, make sure you hold on to it because once it’s gone, it’s gone.’”
As for Anderson, despite the changes to the Spirit Fund over the years, he says the choice is up to the people when they vote on June 14.
“When it comes to taxes I think it’s far better to let the people decide on it,” Anderson said. “Rather than the council deciding if people should be taxed on things five years, 10 years down the road.”
Once the Home Rule Charter was established in Crosby, the city council gained the ability to pass a sales tax by resolution, but they have put it to a straw poll each time it has expired, and voters have chosen to continue it.
Incumbent City Council member Don Wolf and candidate Austin Dimmick both said they support the continuation of the tax, but believe it should be up to the people whether it continues.