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Grove Chamber Urges Voters to Extend 0.4% Sales Tax

Grove Chamber Urges Voters to Extend 0.4% Sales Tax

 

Earlier this year the Grove City Council voted to send a ballot question to Grove voters to decide on extending the 0.4% sales tax originally passed by the City of Grove in 2001 for Capital Expenditures.  The ballot question will be decided on the August 28, 2018 Special Election.  The Grove Area Chamber of Commerce has announced plans for a campaign to ensure passage of the twenty-year extension. 


“This sales tax extension is first and foremost, not a new tax,” said Grove Chamber President Donnie Crain. “This tax provides the City of Grove with the needed funding to fund our water and wastewater debt and, once that is paid, it can be used to address other capital needs like street repairs.  For a tourism-oriented community such as ours, funding these capital improvements through a sales tax allows all users – to include overnight guests and day visitors– to share the burden of these improvements that benefit residents, guests, and local businesses alike.”   


Over the past five years, the 0.4 % sales tax has raised on average $751,884 per year.  Per the original ballot question and enacting Ordinance, the use of this important source of funding is limited to capital expenses of the Grove Municipal Services Authority (GMSA) and the City of Grove and included capital-related debt.   Sales tax revenue from the 0.4 % has been dedicated from the start to assist with the payment of GMSA debt related to the water treatment plant and wastewater treatment plant.   Debt payments for fiscal year 2018-2019 related to the water and wastewater treatment plants will exceed $1,273,000.   Approximately 44% of the debt related to the treatment plants extends through 2034.  The tax, if not extended, is set to expire in 2021. If extended, the tax will not expire until 2041.


“Extending this 0.4% tax is just common sense,” Crain stated. “The money is dedicated to capital debt and improvements. It is not a new tax; no one’s taxes will increase due to passing this extension. Plus, it is an equitable way to fundour capital needs without placing all of the burden on Grove’s residents and businesses.  We strongly urge Grove voters to vote yes to approve the extension of this tax.  Yes is best for Grove.”    


If the tax is not extended, the City of Grove will have to identify other sources of revenue to replace the lost sales tax revenue. There is not sufficient revenue generated from the current sale of water, sewer and gas utilities to cover the additional debt burden that would be placed on GMSA without the 0.4% sales tax.  The most likely means to replace these funds would be an increase in utility rates for water and sewer services in an amount that would generate sufficient funds to cover the annual loss of in excess of $750,000.

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