The idea of a new 1 percent sales tax may face an uphill battle at City Hall.

One week after Mayor Mike Amyx proposed the additional tax to pay for streets, stormwater drainage projects, sidewalks and property tax reduction, three city commissioners balked Monday.

“I don’t think I can support a whole penny,” said City Commissioner David Schauner, who was joined by Commissioners Mike Rundle and Boog Highberger in questioning the tax proposal. “I just think that is too much.”

But the idea of a smaller sales tax increase could live on. Schauner said he was interested in discussing a smaller sales tax that would be more focused on taking care of immediate road needs.

His support could be enough to form a majority on the commission because Amyx and Commissioner Sue Hack have said they want to strongly consider the sales tax idea.

“The comments I’ve been hearing from the public have really been positive,” Hack said. “I think people believe it is an intriguing idea to really go after our infrastructure issues, and I have heard people express support for the idea of potentially lowering our property taxes. Those really hit people hard who are on fixed incomes.”

Amyx said he wants city commissioners to have a “serious discussion” about the tax increase proposal at their next meeting, which is one week from tonight.

“I think there is enough good in this proposal that I would hope people will seriously consider it,” Amyx said. “I think it promotes some good fiscal management.”

Any new sales tax would have to receive voter approval, but city commissioners must agree on the idea first. Amyx’s plan also calls for the 1-cent tax to sunset after a 10-year period, meaning the only way it could be extended is if voters approve it again.

Based on current projections, the tax would generate about $120 million over the 10-year period. Amyx has proposed that $60 million be used to fund street, sidewalk and storm drainage projects. The use of that new money should allow for property tax rates to also be reduced by anywhere from 4 to 6 mills, Amyx said. A mill is $1 for every $1,000 of assessed valuation.

The remaining $60 million would be used to create a city “endowment” fund that would generate interest income that the city could use for a variety of projects.

The endowment provision has created concern for Schauner.

“If you have a $60 million fund, it becomes the target of everybody who has a good idea,” Schauner said. “To call it a lockbox would be a little misleading because I don’t think there’s any good way to truly lock it. I’m not very excited about that part of the plan.”

Amyx has proposed creating a city ordinance that would require a super majority vote of the city commission to tap into the principal of the endowment. City staff members are still studying, though, how much protection that would provide the endowment. An ordinary ordinance can be repealed by a simple majority vote. A charter ordinance would take a super majority vote to repeal, but such ordinances can only be used for certain purposes.

Several city commissioners, though, were wrestling more with the philosophical issues of a sales tax and whether it would be too regressive.

“I want to see some numbers about how an increase would affect average families,” Highberger said. “I want to see how it affects homeowners versus renters, students versus families. I don’t want to rule it out, but I have some concerns about it.”

Rundle said he wasn’t yet ready to support the sales tax idea because he’s not convinced that more money can’t be squeezed out of the current budget.

“I’m a little cool on the sales tax idea right now,” Rundle said. “I still think there’s some money we left on the table during the budget process.”

The proposed budget for 2007 would require a 0.98-mill levy increase, primarily to increase the city’s street maintenance budget by about $2 million. The property tax increase – along with expected increases in property values – would amount to an extra $50 to $60 per year in property taxes for the average homeowner.