Supervisors begin LOST tax renewal process

Posted April 4, 2013 at 5:00 am

By Julie Ann Madden

At their March 26 meeting, Plymouth County supervisors spent about an hour talking with an attorney about an upcoming election to renew and/or change the purpose statement for the county’s Local Option Sales Tax (LOST), which is a 1 percent sales and services tax.

The county has two such taxes.

The first was passed in 1998 by the towns of Craig, Hinton, Kingsley, Merrill, Oyens, Struble and Westfield in Plymouth County. It failed in Akron, Le Mars and Remsen. This LOST fund has no expiration date.

In 2001, the last three towns successfully voted in another LOST 1 percent tax with an expiration date of Dec. 31, 2016. Joining the three towns were all the unincorporated areas of the county.

Now, Le Mars officials are interested in renewing their LOST for a $22 million hospital renovation project. They need to have a special election on the LOST renewal Aug. 6, which is the next special election date available, to secure financing and for good bid letting options.

In addition, Plymouth County officials would like to renew theirs for infrastructure needs with a majority going for bridge and road repairs in unincorporated areas.

“The board, at this time, is supportive of the renewal but not supportive of any unincorporated tax dollars going toward the hospital,” said Supervisor Jack Guenthner, who is researching the LOST issues.

In talking with Attorney John Danos of Dorsey & Whitney LLP of Des Moines, supervisors clarified the following:

• There has been no change in state statutes setting expiration or “sunset” dates for LOST taxes passed without a date, said Danos.

• The cities which have the 1998 LOST tax do not have to participate in this LOST election unless they want to change their statement of uses and purposes, he said.

• When the County Jail/Law Enforcement Center debt ends in Dec. 31, 2016, the cities with the 1998 LOST tax can expend LOST jail payment revenues for any purpose that is not inconsistent with the uses language stated on the original ballot, said Danos.

• Entities can also issue LOST revenue bonds anticipating future tax collections but only for purposes that are specifically listed on the original ballot language, he said.

• The 2001 entities each have the authority to decide whether or not to renew and/or change their statement of uses. Some may not want to renew the LOST tax and others may want to keep the same uses, said Danos.

• Each entity has to call their own election to renew their LOST tax, and they do not have to do it at the same time as other entities. Supervisors cannot declare a LOST tax election for any other entity but the county.

“There is a certain amount of momentum and efficiency certainly in (the Auditor’s Office) that’s created by going ahead and having local elections held simultaneously,” said Danos.

Plymouth County Auditor Stacey Feldman pointed out small towns which have not budgeted for a special election may choose to have the LOST tax placed on their Nov. 5 regular city election.

• Political expediency is the biggest reason I’ve seen an expiration date posed, said Danos, explaining there are a lot of people who feel it simply won’t pass without an expiration date. The most common expiration date is 12 years. An expiration date gives taxpayers a time to rethink the LOST issue.

Danos was completely sure of the above points regarding laws for a change of use but he told supervisors tax extension laws weren’t written as clearly. Therefore, he will do some legal research and report a final analysis to Feldman or County Attorney Darin Raymond.

The Plymouth County Supervisors are having an informational meeting for all city mayors and the general public at 7 p.m., Thursday, April 4 at the Plymouth County Annex building on the courthouse grounds at 215 Fourth Ave. SE in Le Mars.

The 2001 cities need to determine their LOST tax purposes, said Guenthner. “This will be the intent at the April 4 meeting, and we’d leave it up to the cities to determine their purpose statements.”

With an Aug. 6 election, this sets a time line where supervisors must pass a motion by May 13, which is the 84-day statute requirement, notifying Plymouth County Auditor Stacey Feldman of their intent to initiate a special election.

Any entities, including Plymouth County cities, which want to be part of the Aug. 6 election would need to have their tax purpose statements and ballots to the auditor by specific dates to meet legal publication deadlines.

“It seems to me it would be a heck of a lot better if we all did it at the same time,” said Chairman Jim Henrichs.

“I agree with that,” said Supervisor Craig Anderson. “My choice would be November (election) but that doesn’t work for (Le Mars) apparently.”

Another supervisor also agreed with Anderson.

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