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A growing trend — Rugby city sales tax collection up again

By Staff | Dec 26, 2008

Rugby city sales tax collections in 2008 smashed last year’s total, which at the time represented a five-year high.

The city took in $266,602.20 this past year. That was nearly a nine percent increase, or $20,590.48, more than 2007, according to statistics released by Karla Harmel, city auditor-administrator.

Rugby, like many other cities across the state, enjoyed a healthy increase. So what’s behind it?

Well, despite fears of an economic recession across the nation, retail trade here was steady throughout the first three quarters. The area received additional sales tax revenue from additional motel occupancies this year.

Data from the past five years indicates the average annual collection has been $244,290. The nearly nine percent increase over 2007 marks the largest one-year jump since 2004.

The sales tax funds the Rugby Area Job Development Authority (JDA) and provides maintenance and infrastructure funds for city projects. Seventy-five percent of every dollar is designated for JDA use, and the remaining 25 percent is to be used to fund such projects as street repairs, and storm sewer and water improvement projects.

The JDA’s 2008 allocation was $199,951 while the city took in $66,650.

Recently, there has been discussion by some residents of possibly establishing an additional one cent sales tax, and/or tweaking the current sales tax split between the JDA and city, possibly flip-flopping the percentages or splitting 50-50. The motivation behind this is to generate more funds toward future street repairs costs, which are skyrocketing, and lessen= the burden on property owners through special assessments.

Talk of an additional one cent sales tax, however, doesn’t win the favor of business owners, especially those in retail sales. And any proposed changes in the existing sales tax split between the city and JDA would likely face opposition as well, especially from JDA supporters. The city council has not taken issue with possibly establishing an additional one cent sales tax collection or addressed changing the current sales tax structure.

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