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Pay for jail project from county’s reserves

Princeton mayor: Sales tax increase not needed; would impact retail sales

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Officials of the Bureau County Jail are currently giving public tours of their facility for the purpose of highlighting for residents the need for a new jail. I’d be surprised if many come away from the tour taking the position that a new jail is not needed.

So the question we should be asking is not whether we need a new jail, but how should a new jail be financed?

The county is buying the Bureau County Republican building to house a new jail. They are paying $725,000 cash for the building, but the building needs to be renovated. To fund renovations, the county proposes a countywide 0.5 percent retail sales tax. On March 20, Bureau County voters will either pass or reject this proposal via a referendum.

In 2007, the county also had a referendum for a 0.5 percent retail sales tax. The county printed a pamphlet back then, touting the primary need for the tax — to repair and renovate our current jail building. The referendum passed, and since then the sales tax has generated upwards of $9 million for the county.

Many who are touring the jail know that not much has been done to the building since 2007. So what was the $9 million used for? I recently learned that it is used to pay salaries, and while the money can go toward salaries, the principal intent of the money was to go to taking care of the current jail.

Now we are being asked to consider another 0.5 percent retail sales tax to pay for renovations of the new jail building. This newly proposed sales tax does have a sunset clause; if passed, it will end in 20 years.

The 2007 tax referendum had no sunset clause, and it will go on indefinitely.

I’m a taxpayer first, but I’m also mayor of a town that this new proposed tax hurts. This new tax, if passed, will put Princeton’s tax rate at 7.75 percent and, if I’m correct, Spring Valley’s tax rate will go to 7.25 percent. Prior to the county’s passing its 2007 sales tax referendum, Princeton’s tax rate was 6.75 percent and Spring Valley’s 6.25 percent.

As mentioned, there is a sunset clause attached to this new proposed sales tax, so the tax would end after 20 years but not until after bringing in, in today’s dollars, upwards of $19 million. Add to it the never-ending sales tax revenue from the 2007 referendum, and the total will be upwards of $38 million in sales tax revenues, generated from two taxes with the primary intent centered on the jail.

The county does not yet have specific numbers on what it will cost to renovate the new jail building, but they do have a working estimate of $10 million to $11 million. So the overall project may cost around $12 million (with consideration for the purchase price of the building). That’s $38 million over 20 years for a $12 million project — with the $9 million generated from the 2007 sales tax revenue generally written off considering it was to go to our current jail, but was instead used primarily for salaries.

So how should a new jail be financed?

I was surprised to recently learn that the county has over $25 million in cash reserves.

Cash reserves is money set aside for if and when needed. It seems the county could be creative with their reserves, in one form or another, in using them to finance renovations of the new jail building.

Either pay as you go or use the reserves to service debt, if taking on debt for renovations is preferred.

As a resident of the county, I agree we need a new jail, and with all the cash the county has, it seems there are viable ways the county can finance the new jail building renovations that do not include another “jail” tax.

The county has done very well for itself in bringing in and reserving taxpayer money. Maybe I’m wrong, but it seems the time is now for the county to use the large amount of reserves on hand, money we provided as taxpayers, to renovate the new jail building and forego the proposed tax.

Note to readers: Joel Quiram is mayor of Princeton.