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Sales Tax Increase & Civic Center Expansion Concerns

Bismarck Civic Center

Bismarck Civic CenterBismarck Mayor John Warford has proposed a one percent increase in the city’s sales tax, bringing the total sales tax to 7% in the city of Bismarck. If approved, Bismarck would have the highest sales tax of any city in North Dakota. This comes after a failed attempt earlier this year by the state legislature to eliminate all sales tax on clothing, in reflection to Minnesota’s similar tax program.

Warford claims one benefit to the increased tax is that it will actually lower property taxes; a tax for a tax if it were, however he doesn’t seem to realize the impact it may have on local businesses, especially those specializing in big-ticket items like cars, boats, and even electronics, as many citizens already travel to nearby Montana, which has no sales tax. Car dealerships in Bismarck would have a tremendous disadvantage to those located in Mandan or other nearby cities. A 1% increase on a $20,000-priced car equals an extra $200 simply in sales tax. Now, this may not turn the average citizen away, but the increasingly more common penny pinches might be more apt to buy a car from say… Resslers rather than Stan Puklich simply to save that $200.

Why is the mayor proposing this sales tax increase? Amongst other projects, the additional income will primarily provide funding for a $26 million expansion of the Bismarck Civic Center. Built in 1969, and already expanded several times since, the Bismarck Civic Center is the state’s third largest public venue, behind the Fargodome and Grand Fork’s Alerus Center.

The planned Civic Center expansion is to be completed in three phases, one of which will include a 16-story 260-room hotel & waterpark, built by Winnepeg-based Canad Inn, who is in the process of building a similar hotel adjacent to the Grand Forks Alerus Center.

One issue that arises is that the proposed hotel, which will stand just three stories shorter than the State Capitol, is to be built in the lot between the Civic Center and former Dan’s Supervalu (now Gold’s Gym). This will seriously reduce the amount of parking space for the Civic Center, especially considering that the hotel patrons will also have to find a place to park. The plan does include an underground parking garage, however I fear it may not be enough accommodation.

Click to enlarge in new window.This hotel’s construction could also seriously impact other area hotels, most notably the Ramkota and Expressway Inns, as their already close proximity to Kirkwood Mall and the Civic Center represents their primary patron. Another question is if Bismarck needs another hotel, especially one as large of 260 rooms, after the opening of three hotels in 2007-2008 totaling 250 rooms.

This is not the first major project proposed recently, following the nearly completed Bismarck State College Aquatic Center, which too was partially funded by the city, and a poised multi-million dollar expansion of the State Heritage Center. It seems that the city and state governments are eager to spend money on non-essential projects in the midst of one of the nation’s worst economic downfalls, as if trying to prove to everyone that North Dakota’s economy is not affected. North Dakota may currently have a huge budget surplus, but if this massive spending continues we will be bordering the deficit line like most other states.

There does not seem to be much public support for either a sales tax increase or the proposed Civic Center expansion, and it therefore seems unlikely to pass if it goes to a public vote, however if local history is representative, it will continue to be pushed until it does pass.

Related blog about this topic:
Mayor Warford Changing His Mind On Raising Sales Tax?