Special election planned for city sales tax

Ten years ago, Holton residents voted to approve a half-cent addition to the city’s municipal sales tax that would be used to fund infrastructure improvements and debt reduction in the city, and the addition passed by a three-to-one margin.

This June, city residents will go to the polls to decide whether that sales tax addition will remain on the books for another 10 years.

During Monday’s regular Holton City Commission meeting, commissioners approved a resolution setting a special city election on Tuesday, June 6, at which time voters will consider extending the half-cent sales tax from Jan. 1, 2024, through Dec. 31, 2033, noting that the existing sales tax has allowed the city to reduce its indebtedness and improve its water, sewer and electrical services to city utility customers.

“We’ve done a lot of projects with that money that we couldn’t have done without it,” Holton City Manager Kerwin McKee said, citing such projects as rehabilitation of the city’s water treatment plant, sewer line cleaning and rehabilitation and sewer interceptor repairs near Elk Creek that have been paid for with funds generated by the half-cent sales tax.

“If it hadn’t been for that (sales tax), I don’t know how many times I would have had to have been out borrowing money,” McKee said.

He also reminded commissioners that the sales tax is a “user tax” that is paid not only by Holton residents but by anyone who comes to Holton “and buys gas or shops,” echoing a selling point of the city’s original campaign to get the sales tax approved in 2013 — that the tax did not have an adverse affect on property taxes paid by Holton residents.

If voters do not approve the sales tax extension, the current half-cent sales tax that went into effect in 2014 will expire at the end of this year. The vote would not affect the previously existing quarter-percent sales tax, which went into effect in 1995 and is used to fund street repairs in Holton.

Holton City Clerk Teresa Riley said that since the half-cent sales tax went into effect, it has generated a total of $4,467,349.59 for infrastructure projects. A total of $2,875,041.28 of that amount has been spent so far, leaving $1,592,308.31 in reserve for future projects.

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