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Thursday, May 5, 2016

Purdy voters asked to revise sales tax

Thursday, September 17, 2009

(Photo)
The #2 water tower in Purdy, next to the city park and public school. [Times Photo by Murray Bishoff]
The Purdy City Council has opted to seek voter approval to revise its sales tax to eliminate the potential legal conflict raised by Farmington attorney Tom Burcham.

At a special meeting on Aug. 24, council members voted to ask city residents to alter the purpose of the city's second one-cent sales tax, approved in April 2005. Passage of the tax created two one-cent sales taxes, both for the general fund.
Burcham has sued the city claiming that having two "stacked" taxes for the same purpose is illegal. The city is presently contesting Burcham's claims in court. A second hearing before Circuit Judge Robert Wiley is pending.
Faced with similar litigation, the city of Mt. Vernon converted one of its two half-cent capital improvements sales taxes to street maintenance. Voters approved the change in a special election on Feb. 3. The changeover was made in July, sunsetting the old tax and starting the new transportation tax without interrupting the revenue flow.
Purdy aldermen voted to ask voters for similar authorization, but splitting the one-cent tax into two half-cent taxes for different purposes. Two ballot initiatives were approved at the special meeting to be placed on the Nov. 3 ballot.

The first proposal reads: "Shall the City of Purdy replace the city general revenue sales tax voted on in April 2005, and impose a tax of 1/2 percent for transportation purposes, leaving the amount of sales tax the same as before at a total city sales tax of 2 percent?"

The second proposal, which follows, commits the remaining half-cent from the original one-cent tax: "Shall the municipality of Purdy impose a sales tax of 1/2 percent for the purpose of funding capital improvements, which may include the retirement of debt under previously authorized bonded indebtedness and to replace the city general revenue sales tax voted on in April 2005, leaving the amount of sales tax the same as before at a total city sales tax of 2 percent?"
A simple majority would be required for passage. Defeat of both proposals would leave the tax unchanged. Ballot language does not call for a reduction in the city's sales tax total. Mt. Vernon used a similar strategy in its special election.

Aldermen unanimously passed two ordinances changing the one-cent sales tax into two specific half-cent taxes, pending voter approval.

Changing the purpose of the tax would essentially nullify Burcham's complaint. The change would eliminate the potential loss of sales tax revenue by a court order stemming from Burcham's lawsuit.

In Mt. Vernon's case, Burcham's lawsuit has not been dropped despite the sales tax revision. The case is still pending in Lawrence County Circuit Court.



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