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1/2 cent tax worries some businesses

Published 12:00am Saturday, October 21, 2000

When the 1/2 cent sales tax increase proposal hits the ballots in January, some may have a sense of deja vu. It was only two years ago that residents voted down an increase meant to fund the conference center, an expanded YMCA and parks and recreation improvements. The $9 million bond referendum of 1998 was shot down two to one by voters, leaving the projects to find alternative methods of financing. As to the newest sales tax proposal to fund a $3.6 million library expansion? Many feel they don’t have enough information to firmly make a decision on it yet. Knowing there will be a media blitz by the associated committees, people expect to learn exactly how and in which manner it will affect them the most. &uot;Coming from somewhere that had the 1/2 cent increase and moving here, where there isn’t one, I don’t see a lot of difference in my budget,&uot; said Wal-Mart assistant manager Beth Arnsdorf, who moved here from Mankato. &uot;Personally, as a consumer, I haven’t noticed.&uot; As far as how it may affect customers at the Fergus Falls store, Arnsdorf said she thinks that it probably won’t be all that noticeable when they’re shopping. &uot;It’s such a slight amount that you don’t really feel the pinch,&uot; she said. &uot;And I speak from experience.&uot; Pine Plaza TV & Appliance owner Donna Kimball disagrees. Kimball said she believes their sales would be affected, since they specialize in higher-priced items – which pack a bigger punch with taxes. &uot;It definitely would slow down sales,&uot; she said. &uot;I know it would affect business.&uot; Minnesota Motor Company General Manager Steve Brimhall said he’s not sure how much of an impact the increase would have on business. A 1/2 cent sales tax increase would cost a consumer about $100 on the purchase of a $20,000 car. And that $100 could make or break a deal for some buyers, he said. &uot;A car is a big purchase and that 1/2 cent may potentially keep out of town people from buying from an in-town dealer,&uot; Minnesota Motor Company General Manager Steve Brimhall said. &uot;What would probably happen is that car dealers would end up eating that tax increase and basically making a ‘donation’ of that amount with each purchase.&uot; One of the concerns Brimhall has is with timing of the referendum and its proximity to the school board’s referendum. &uot;Last time everything came up all at once and none of it worked,&uot; he said. &uot;Having both of them so near each other makes it confusing for people.&uot; The $45 million school board referendum will be voted on March 13, 2001, and will be using property taxes to fund the new building and renovations.