Story originally printed in the Vernon Broadcaster or online at www.vernonbroadcaster.com
Published - Tuesday, July 01, 2008
Sales tax targeted as way to pay for dam repairs
The Vernon County Board's Finance Committee discussed implementing a new .5 percent sales tax to establish a fund to pay for maintenance and repair of the county's flood control dams.
The committee met last Thursday to discuss the sales tax and other options to pay for dam repairs. The finance committee tabled a resolution in support of the sales tax and will gather more information and bring the resolution back to the committee in July. The committee hopes to get a resolution to the county board by August, so it can be approved and possibly placed on the November ballot as a referendum.
The county has 22 flood control dams and 21 of the 22 suffered some damage in the flooding in August 2007. Some had only minor damage while others have estimated repairs totaling more than $3 million. Total damage from last August was estimated at about $10 million. State and county officials are still in the process of estimating how much additional damage was done to the dams in the most recent June 2008 flood. The $10 million does not include the estimated $1.7 million needed to repair Jersey Valley dam
The county is currently struggling with how to make up for a budget deficit that could be anywhere from $300,000 to $600,000. The county started its year with a budgeted $306,000 shortfall that the county board wanted to make up for through a hiring freeze. That freeze has not worked and further losses from low interest return on investments has led to a projection of a higher year-end deficit.
The county met with Rep. Lee Nerison (R-Westby) and Sen. Dan Kapanke (R-La Crosse) to see if it could impose an additional .5 percent sales tax to pay for repairs. The county already collects a .5 percent sales tax that generates about $1.1 million in revenue. Kapanke and Nerison said the county will need to put the issue to the voters in a referendum, and if it passes, they can then seek the approval of the state legislature.
The county has received orders from the Department of Natural Resources to repair five dams and there may be more following the recent flooding. So far Jersey Valley, Seasbranch, Hidden Valley, Yttri-Primmer and Runge Hollow are under DNR orders. Yttri-Primmer was intentionally breached last week because of fear it would fail if it filled again.
Runge Hollow and Hidden Valley underwent emergency repairs following last year's floods and crews were working on them again this week. Duck Egg Dam also had emergency repairs after this month's flood.
Another option the county is considering to pay for the repairs is to borrow the money by issuing bonds and repaying the amount over a number of years. The finance committee received a preliminary analysis from the bonding company that was used to finance the jail, Ehlers and Associates, on how much a bond issue would cost the county.
According to the rough estimates, the county currently has a debt payment of about $725,000 per year until 2024 for debt incurred to build the new jail. If the county bonded for an additional $10 million, that debt payment would double to about $1.45 million per year through 2027. That projection is based on an estimated interest rate that is a .5 percent higher than current rate. The total additional impact to borrow $10 million on a $100,000 property would be an additional $45 in property taxes over 20 years.
"I think it is important for people to understand the difference between the sales tax and bonding," finance committee member Geoffrey Banta said. "With bonding it goes right on the property tax and the sales tax won't. I don't think people understand that and they need to understand that. Maybe if people understand we can get some pressure on the people in Madison. I think it is absolutely ridiculous that the state is dictating what we do here in Vernon County."
"Bonding we can do but the sales tax has to go to Madison," committee member Ole Yttri said.
"I think it will shed a little more light on the issue with all the media attention we have had with the dams," committee member James Servais said.
County Conservationist Kelly Jacobs, whose department oversees the dams, said she looked into the sales tax statute and what it says is that the sales tax above the allowed .5 percent can only be used for a stadium district.
"The only two that have been instated are the Brewers one and the Packers one," said Jacobs said. "And my understanding is that the only reason they were approved is because they created jobs and the economic development."
"To me the people who live below these dams are a hell of a lot more important than the Packer Stadium or the Brewer Stadium," finance committee chairman Brian Richardson said.
Banta said the issue of dam repair seems to have changed with the flooding.
"I think the difference in the issue with Jersey Valley was there was a lot of recreation," said Banta. "I know there was a group of people that really pushed for that, and I respect them, but when you start saying we are going to have a place for someone to go fishing and we are talking about we are going to be laying people off in the second breath. I think now the issue is safety."
Jacobs said it was important to note that the Yttri-Primmer Dam was leaking in the same way that Jersey Valley has been, it just became more unstable because of the nature of the leaks. She said Jersey Valley is also unsafe and that is why the repairs need to be done.
All stories copyright 2006 Vernon Broadcaster and other attributed sources.