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Area towns bank on Carroll’s local option sales tax

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A state formula aimed at boosting regional development means small towns orbiting Carroll benefit greatly from the local option sales tax collections in the county seat.

Not all of the money generated through the 1 percent local tax on retail sales in Carroll stays in the City of Carroll.

The City of Carroll generates 79.7 percent of all taxable retail sales in Carroll County, but only 42.2 percent of the money pulled in by local option sales taxes in the county goes to the City of Carroll. Much of it is disbursed to area communities — meaning that while Carroll receives $1.6 million annually from the local option sales tax, Manning gets $240,000, Coon Rapids $211,000 and Glidden $172,000.

Other cities in the county receive between $12,000 and $71,000 annually, depending on their population size, and some of these cities create very little in retail sales.

All of this will make the vote on re-upping the local option sales tax Sept. 8 in the City of Carroll a highly watched, and defining, referendum for the full county, as other cities in the county would have to hike property taxes substantially to make up for services if the local option sales tax fails in Carroll.

The referendum requires 50 percent for passage.

The Board of Supervisors would face challenges with a “no” vote as well. The county receives about 30 percent of the local option sales tax revenue, money that can be used for roads and bridges and mental health services, among other things. It totals about $1.1 million a year. With no local option sales tax in Carroll, that figure would plummet about $750,000.

Coon Rapids and Manning each would lose about $150,000 annually if Carroll voters reject the extension of the local option sales tax.

This is the reality: Carroll is the economic engine that drives retail sales for the full county, aided by the many residents of area communities who shop in the city.

In fiscal year 2019, the total taxable retail sales in Carroll County stood at $319 million — $254 million coming from the City of Carroll.

City of Carroll voters in August 2012 overwhelmingly approved the extension of the 1 percent local-option sales tax for another 10 years.

The ballot measure passed with 71 percent of the vote — 555–229. It carried all four wards in the city handily.

On May 13, 2003, the local option sales tax passed by just 48 votes in the City of Carroll — 1,229–1,181. The ballot language required the city to use 25 percent of the local-option sales tax money for property-tax relief, with 75 percent available for other city business. That language again appeared on the ballot in 2012, as it will in September.

There is no sunset on the September vote to extend the LOST.

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