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THE CITY REBORN FROM THE ASHES OF AMERICA'S MOST DISASTROUS FOREST FIRE
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County Board Keeps Sales Tax, Cuts Sunset Clause

Issue Date: September 21, 2016

After some long hard discussion at its meeting on Tuesday, Sept. 20, and at several committee and board meetings in the past three months, Marinette County Board voted 17 to 11 to remove the sunset clause included when the half a percent sales tax ordinance was adopted in 2001. The sales tax has been generating about $3.5 million a year in recent years.

Voting in favor of the motion that removes the sunset clause and in effect keeps the sales tax in place indefinitely as recommended by the Finance Committee were supervisors Joe Banaszak, Glenn Broderick, Gilbert Engel, Paul Gustafson, Kathy Just, Ken Keller, George Kloppenberg, Tom Mailand, Dennis Marcely, Don Pazynski, Al Sauld, Christopher Schmidt, Vilas Schroeder, and David Zahn.

Opposed to removing the sunset clause were supervisors Josh Anderson, Russ Bauer, Robert Holly, Shirley Kaufman, Fred Meintz, Rick Polzin, Janis Porfilio, Bill Stankevich, Clancy Whiting, Cheryl Wruk and Board Chair Mark Anderson. Supervisors Mike Behnke and Al Mans were absent due to illness and excused.

By removing the provision that would have ended the sales tax in 2021 County Board made it a permanent part of county finances unless further action is taken some time in the future. In doing so, the board broke a promise made to voters when the sales tax was adopted to pay for construction of the Law Enforcement Center.

At recent Finance and Executive committee meetings and during County Board discussion prior to the vote, County Administrator Shawn Henessee had warned that even if there is no new borrowing, if the sales tax were to end as scheduled in 2021 he would either have to cut $800,000 from the budget for each of the next five years or the property tax would quadruple after 2021.

State law limits property tax increases for operating expenses to the amount of new construction, which for Marinette County was .8 of a percent last year. The levy limits to not apply to property taxes levied to pay off long term debt. Since 2014, the county has borrowed some $$33 million for capital improvement projects. Starting last year, the debt payments exceeded the amount available from the sales tax and the difference was added to the property tax levy.

However, as Finance Committee Chair Vilas Schroeder has repeatedly pointed out, the Marinette County property tax rate remains the third lowest in the state's 72 counties.

As revised, the Marinette County ordinance allows sales proceeds to be used to pay for economic development, tourism promotion, capital improvement projects, long-term debt payments, and property tax reduction.

As requested by County Board last month, Henessee had prepared a plan for eliminating all debt by 2029 while maintaining the highway department and the county road system, but it hinged on keeping the sales tax in place.

It also required cutting additional borrowing for roads from the $19.5 million in the currently approved 5-year Capital Improvement Plan to less than $6 million, and no borrowing for roads in 2020 and 2021. It included cutting $100,000 a year from the annual snowplowing allocation.

The Highway Committee on Sept. 14 approved revisions to the capital improvement plan that removed several reconstruction projects entirely but did not replace them later in the plan. That brought objections from the Finance Committee at an 8:15 am. meeting that preceded the County Board session on Tuesday. Vote was to send the revisions back to the Highway Committee with instructions for them to come back with a plan for how to deal with these roads in the future. Projects removed but not replaced were $2.4 million scheduled for County W from Hwy. 64 to Hwy. 141 in 2017; $930,000 for overlay on County C; $345,000 for overlay on County P, and $1.365 for reconditioning County W from Reif Road to Hwy. 64 in 2018 , plus work slated for other roads in 2019 and beyond. No provisions were made for any of those projects in future years, or at least they were not listed in a long term capital improvement schedule.

Henessee had prepared a response to questions from Anderson and others in regard to an operating deficit, as well as a budget message and a plan for eliminating debt by 2029.

At the full board meeting, Anderson suggested separating the question, and subsequently the board approved the budget message but postponed adoption of the plan to eliminate debt. That plan included taking $10 million from county reserves if necessary. The reserves would be the $20 million that was put into a property tax reduction fund from the sale of Pine View Health Care Center and Bay Area Medical Center, the former Marinette County General Hospital.

Henessee said the county has been paying about $1.1 million more a year in employee health insurance premiums than other counties of comparable size, and that savings could be used to cut the impact of ending the borrowing cycle. He prefers not to use the reserve funds if possible.

Prior to the vote that makes the sales tax permanent, several supervisors referred to the promises that were made in the past.

"When we passed the sales tax we said 20 years, and the only way I would favor getting rid of it is if a good portion of the funds would go to the District Attorney's Office and the Sheriff's Department," Wruk declared. She said these are reactive departments which have no control over their expenses and need to be funded.

"The public did not want the sales tax," Bauer recalled. "We had to promise to end it in 20 years." He too opposed removing the sunset provision.

"I think it's a real mistake to send things in perpetuity forever," Holley declared.

Pazynski favored removing the sunset provision. He said a lot has happened in 15 years, and taxpayers in the county have greater and greater needs. "We're not taking food from children or the elderly," he said, and referred to the half a percent sales tax as such a negligible amount that no one would miss it.

"As much as we don't like it, we are in a difficult situation," commented Engel. "This is not a burden on anybody."

Sauve and Schroeder both mentioned that with the sales tax, the tourists who visit the county help pay for the cost of operating it.

Just wondered how they would replace the $3 million or so that the sales tax provides.

Polzin said eliminating the sunset provision gives a bland check to county government,

Meintz recalled a year before the sales tax was adopted there was a referendum in which electors rejected the sales tax idea, but then a year later County Board adopted it with the promise that it would end in 20 years, when the Law Enforcement Center was paid for.

Henessee said the decision was up to the board, but the only options to extending the sales tax would be to make $800,000 to $1 million in budget cuts each year for the next four years or increase the property tax levy for debt service to approximately quadruple the current property tax rate.

Henessee said as he looks further into the health insurance issue he is becoming more confident that huge savings are available.

He said Marinette County is paying $31,000 a year for every employee with family coverage, while other counties on average pay $11,000 less per employee.

"I want to be fair to our employees, but we also need to be fiscally responsible," he declared.

The county currently has a wage benefit study in progress, but that did not enter into the discussion.

In other action, the board:

*Easily approved revisions to the Shoreland Zoning Ordinance as recommended by Zoning Administrator John LeFebvre and the Land Information Committee;

*Adopted the MarOco budget as approved by the joint Marinette/Oconto county governing committee;

*Approved temporary committee assignments to replace Peshtigo Supervisor Mike Behnke until he is able to resume his duties on the board. The appointments put Phillips on the Law Enforcement and Emergency Management Committee, Keller on the Building and Property Committee, and Holley on the Personnel and Veterans Service Committee.

*Reappointment of Shirley Prudhomme of Crivitz as a member at large on the Tourism Alliance Committee for a new term expiring in April of 2018 was approved.

*There were annual department head reports from Information Services Director Kevin Solway and Emergency Management Director Eric Burmeister.

*On recommendation of the Building and Property Committee the board approved agreements with SGTS Inc., for a building access control system at a cost of $114,563 for automatic locks and key fob entry system on doors at the courthouse and the Health and Human Services buildings, and with Camera Corner/Connecting Point for replacement of jail video system cameras and software at a cost of $140,972.85. Funding for both projects is to come from money borrowed for the 2016 Capital Improvement Plan.

*As recommended by the Finance and Health and Human Services Committees, the board approved transfer of $49,075.20 from the Health and Human Services Department Fund Balance to its Youth Aids account for juvenile foster care placement.

*A resolution opposing the proposed Back Forty mine project was approved without dissent.


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