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Council rejects second-reading amendment to use sales-tax penny for property tax relief
Summary
On second reading the Minot City Council failed to adopt an amendment tying a portion of a proposed sales-tax 'first penny' to economic development and job creation; the ordinance itself failed on second reading and will require further work by council and staff.
On Oct. 20 the Minot City Council held a second reading on an amendment and ordinance concerning a proposed "first penny" sales-tax allocation (a local option sales-tax allocation earmarked for property tax relief and other uses). An amendment offered by Alderman Olsen to require at least $900,000 of the revenue be allocated to job-creation and economic-development activities failed 3'to'4. Council members who dissented from the amendment were Aldermen Blessum, Fuller, Pitner and Samuelson.
After debate the full second-reading motion also failed 3'to'4 with dissenting votes from Aldermen Hayes, Janser, Olsen and Pitner. The defeat means the second-reading proposal as written did not pass and the council must decide whether to refine the ordinance language, reintroduce it or alter the budget to reflect different revenue assumptions.
Why it matters: The vote affects the city's planned revenue and budgeting choices. City finance staff warned that failure to adopt the measure as proposed reduces forecasted general-fund revenue tied to the sales-tax allocation and will require either cuts or use of reserves to balance the budget. The finance director briefed the council that the appropriation side of the budget remains but the revenue side would be short roughly $1 million under current assumptions, shifting the burden to reserve draws or expenditure reductions.
Council discussion: Supporters of the amendment said setting a minimum allocation for economic development would guarantee funding for initiatives discussed during recent budget deliberations. Opponents said embedding a fixed dollar allocation in the sales-tax ordinance would strip the council of flexibility for future budget decisions and preferred leaving allocation decisions to annual appropriations processes.
Next steps: The council did not adopt the ordinance on second reading; staff will need to reconcile the budget and return either an adjusted ordinance or additional budget options for council consideration.
