Back to the future: Ontario elected leaders ponder sales tax

By Pat Caldwell

The Enterprise

ONTARIO — Businessman Norm Crume didn’t want an Ontario city sales tax in 2004.

He was so opposed joined a successful effort to squash it.

Fast-forward more than 12 years. Crume, now an Ontario city councilman, isn’t sure a sales tax would be bad.

City officials are considering once again asking Ontario voters to impose the local sales tax.

The owner of Norms Auto Electric said he is firmly on the fence regarding the issue for one reason: His experiences as a city councilman.

“Being there for eight years and seeing where the budget is at and our negative cash flow compared to overall expenses makes me realize we either need to make more cuts or have more revenue,” he said.

Costs to provide city services keep going up but revenue coming hasn’t kept pace, Crume said.

Those costs include labor, parts and climbing mandated outlays for the state Public Employee Retirement System (PERS), he said.

“We have no control over that,” he said.

If no new revenue is developed before 2018, the city’s general fund will be short $1.5 million to cover existing costs.

“That’s just maintaining what we have,” said Adam Brown, Ontario city manager.

Then city recently held three public sessions to get community sentiment about the sales tax.

“They went pretty well. I think, in all, we had 120 people show up between the three meetings,” Brown said.

Brown said there was a mix of opinions.
“There was obviously a large crowd against and some that came were for it and some that came who were undecided,” he said.

Brown he will now compile the information from those sessions and questionnaires for the council to review.

Brown said a 1 percent sales tax would generate more than $3.5 million a year. However, he said the city hasn’t settled on a tax rate to propose.

“To hone in on a number we’d probably have to get an economist to get a better idea of what our tax base is,” Brown said.

While Brown said the city doesn’t face an acute financial crisis now, it will down the road without new revenue sources.

“Certainly, if we don’t figure out something by 2018, we will have to cut,” he said.

Making such cuts could mean losing important city services.

“We’d have to prioritize. You know, is the park program more important than the police department? You get down to those decisions of which one is more valuable,” he said.

Crume said he still isn’t totally sold on a sales tax proposal.

“My base, core feelings haven’t changed but, at the same time, I totally understand where we are at. I don’t know what else to do,” he said.

He said if anyone can develop a better plan, he is ready to listen.

“We are open to any and all ideas,” he said.

Crume said the city has already adopted a number of steps to cut costs. The city shut down its aquatic center, golf course and consolidated its 911 dispatch service with the Malheur County’s Sheriff’s Office. The city also disbanded its public works department and privatized its finance department, Crume said.

“All of these things have been very good for the overall benefit of the city and overall cost less,” he said.

Crume also said the city also operates with 60 fewer employees now than when the first sales tax plan was put before voters.

“We are doing as much but with less employees,” he said.

“But it isn’t enough, he said.

“There is nothing left to cut. There is no padding left,” he said.

In 2004, Joe Dominick led the fight against the 1 percent sales tax initiative. His effort sparked an interest in civic service and he was elected Ontario mayor. Dominick resigned the post in 2014 and walked away from the city political scene.

Dominick, who owns Domincik’s Quick Print in Ontario, said his opinion regarding a sales tax for the city is unchanged.

“I am totally against it and I hope I don’t have to lead the fight again,” he said.

Dominick said his opposition is based on economics.

“I don’t want the city of Ontario to lose the sales from across the river (in Idaho),” he said.

Brown said some attending the public sessions worried that local merchants would lose customers because of a sales tax. Brown’s not sure.

“A lot of people think 1 percent versus 6 percent won’t change behaviors and a lot think it will,” he said.