City OKs sales tax referendum

A move for a sales tax increase in Lebanon passed its first hurdle Tuesday.
Feb 19, 2014

A move for a sales tax increase in Lebanon passed its first hurdle Tuesday.

Lebanon City Council passed on first reading an ordinance to ask voters for a half-percent increase on the city’s local option sales tax, raising the rate from 2.25 percent to 2.75 percent.

“The main idea of this is if we increase the half-cent sales tax, then we’re looking at probably about a 30 percent reduction in our city of Lebanon property tax, which should equal around 18 cents,” said Craighead.

State law allows municipalities to set location option sales tax rates up to 2.75 percent on the first $1,600 of any single piece of personal property.

The ordinance would allow the city to place the question on the ballot in a special election.

Councilor Kathy Warmath cited concerns about holding the referendum during a special election in May, as opposed to during the general election in November. She questioned whether employers would be required to allow employees time off to vote.

She proposed an amendment to stipulate that the referendum being held instead in November, but failed to garner enough support for it.

Councilor Rob Cesternino said the referendum could get buried in the multiple other issues facing voters during the general election.

The measure ultimately passed, but narrowly, with Lanny Jewell, Fred Burton and Kathy Warmath voting no and Joe Hayes, Tick Bryan and Mayor Philip Craighead voting yes.

Craighead expressed surprise at Jewell’s vote.

“I’m very disappointed because Mr. Jewell had told me all this time that he was for the sales tax,” said Craighead.

Jewell said, though, a few factors changed his mind on the ordinance as it stands.

“I understand you can’t put [a property tax reduction] on the ballot, but we still don’t have anything that ties our feet,” said Jewell. “We can say we’ll drop it 30 percent, but let’s put something on the floor that says it.”

He also cited concerns similar to those expressed by Warmath.

“I had somebody that talked to me this past week [and it] really hit home,” said Jewell. “He said, ‘A lot of us don’t catch the special elections, so are you going to say my vote doesn’t count?’”

Jewell said he would also prefer to designate where the revenues from the sales tax increase would go.

“I know the last time they ran on the ballot for the sales tax, the council at that time obligated the money,” said Jewell. “If you’re talking about $2.5 million extra that [Craighead’s] showing, let’s go ahead and tell the people where we’re going to spend it.”

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