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Sales tax collections ahead of schedule

Sales tax graphic

WORTHINGTON — When voters here passed a half-cent sales tax, it was limited to no more than 10 years. 

Nearly halfway through that time frame, collections are surpassing the projected amount, meaning the collections would end early.

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“We’re still ahead of schedule in our projections,” Worthington City Administrator Craig Clark said. “Over the last 12-month period, our collections are a little higher than our year-to-date average. We have a natural cost of goods going up.”

In 2008, voters approved a sales tax option for 10 years or until a certain dollar amount was reached. That amount was a little more than $6.2 million.

“We’re able to not only have the construction costs, but principal and interest, bond issuance costs, so it will be a total of $6.292 million,” Clark said.

As of April 1, nearly $3.5 million has been collected.

“It’s positive to see there is continued strength in that,” Clark said. “We don’t have to worry about whether or not there will be appropriate collections to cover our expenditures.”

The money from the half-cent tax is going toward paying for the Worthington Event Center and an addition at and renovations to Memorial Auditorium.

“The number of events being held at the Event Center certainly demonstrates that it was a wise investment from the taxpayers,” Clark said. “Not only that, but it’s a beautiful amenity for our community. We’ve heard nothing but vast compliments of the facility.”

At the auditorium, a new lobby and bathrooms were constructed and an air conditioning system was added.

“Memorial Auditorium has always been a jewel for the city,” Clark said. “Having that enhancement really helped with the facility and the usability of the facility and making it more of a year-round alternative. It has the wow factor for folks.

“It really demonstrates that when voters come together around an issue, the power of what that can translate to in a tangible facility like those two we have for the city is quite awesome.”

After the tax was approved by the votes in November 2008, it took full effect the following June. Since then, the amount collected has been increasing — putting collections ahead of schedule.

“When it was created, it probably erred on the side of being conservative and not overextending ourselves on something we couldn’t afford,” Clark said. “We struck the right balance on that moving forward as well.”

By using the average monthly collections from the beginning of the term, it would take eight years and nine months to hit the goal, putting the ending date in March 2018. However, by looking at the average for the last 12 months, it would take three months less — meaning the collections would be completed in December 2017.

“Either way we’re doing well,” Clark said. “We don’t know what the future collections might be. It could be an economic slump or that sort of thing. You never count your chickens until they hatch. But, things are looking good. The natural increase in the cost of goods, we can presume, will maybe shorten that window. Yet, we can’t necessarily count on that either.”

While there has been talk about what a future sales tax option may be used for, Clark said the state requires a one-year hiatus between potential projects. But just over halfway done, Clark said there aren’t any definite plans at this point.

“We are still considering where this might go in the future if the sales tax would continue,” he said. “There’s a couple different alternatives that have been talked about if we would do something different in the future.”

Community Content Coordinator Aaron Hagen may be reached at 376-7323.