There's an ongoing undertow of citizen sentiment in Rapid City, one that continually stokes the embers of criticism when it comes to city projects and the use of property taxes.

Some feel their property taxes are increasing to fund the new civic center arena. Not true. Others feel their taxes are increasing to fund the new OneHeart center. Not true.

In reality, both projects are using Vision Funds with sales tax as the driving revenue source, not property taxes.

The biggest single source of revenue for the city is general sales tax. All taxable sales made within city limits are assessed a 2 percent municipal sales tax. For FY 2018 and beyond, the city council approved changes to the allocation of sales tax revenue with the general fund receiving 50 percent, the capital improvements (CIP) account getting 29 percent and Vision account receiving 21 percent of the revenue. This change allows the city to allocate more tax revenue to the general fund as well as to much-needed infrastructure improvements through the CIP and Vision accounts.

Let's be clear, since opening in 1977, the Rushmore Plaza Civic Center has never been a recipient of the city's general fund tax dollars for civic center operational expenses. Rather, the civic center, along with Visit Rapid City, receives the gross municipal receipts tax, also known as the bed, board and booze tax (BBB). This 1 percent tax is imposed on lodging, prepared foods, alcohol sales and entertainment within the city. The BBB generates roughly $3.3 million annually in receipts for the civic center. As for construction of the new civic center arena, it will be built through the use of bonds and Vision Fund sales tax dollars.

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Not an increase in property taxes.

As to property taxes, the second biggest source of tax revenue for the city is the real property tax. But do you know how your property tax dollar is divided? In 2018, the general fund received $16,896,289 in property taxes, including delinquent taxes. In 2018, The Rapid City School District received 50.2 percent of the owner occupied property tax revenue, Pennington County 29.8 percent, the city 20 percent and the water district less than 0.1 percent.

In reality, it is sales tax and not property tax that supports the Vision Account. It is Vision Account sales tax dollars that helped build the original civic center in 1972. It is sales tax revenue that has supported numerous Vision Account community projects since the 1990s — projects that have helped dramatically improve the quality of life for city residents and visitors. Sales tax/Vision Account revenues built the south and west community gyms, Roosevelt Swim & Ice Centers, Rapid City Performing Arts Center and Main Street Square, just to name a few.

And it's Vision Account/sales tax revenue and not property taxes that is funding the $5 million in funds approved by the city council in January and March for Rapid City Collective Impact's OneHeart Campus. The Vision Account/sales tax revenue will be used for the purchase and redevelopment of Kansas City Street properties for the OneHeart Campus.

In their own ways, the new civic center arena and the OneHeart Campus will have dramatic impacts on the future of Rapid City. As these projects move forward, it is important city residents recognize these projects are not increasing their property tax obligations. Rather, it is sales tax — through the Vision Account — that will help bring these two important and needed projects to reality.

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Steve Allender is mayor of Rapid City.

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