That half-cent increase, which will take effect Oct. 1, is expected to raise at least $150,000 a year and, by city council decree, will be used only for the development of the aquatic center-although, legally, the revenue is designated for "public recreational facilities" in general.

But the half-cent increase does raise the question: How is the rest of the revenue from local sales taxes used?

To the state's base rate of 5.3 percent, Marion County added a county-wide tax of 1 percent in 1987.

Hillsboro and Marion are the only two cities in Marion County that have an additional local tax. Hillsboro has had a half-cent tax since 1985 and Marion added a three-quarter-cent sales tax in 2002.

-- County revenue

Half of the county's 1 percent tax-which generated $877,549 in 2004-is distributed among the cities of Marion County based on a formula that takes into account a city' population and property-tax mill levy.

Hillsboro Mayor Delores Dalke said the state's distribution formula is confusing.

"Nobody understands the formula, but if you keep your mill levy down, you get less county sales tax," she said. "Because Hillsboro has kept its mill levy down, we don't get as much county sales tax as we would if we allowed our mill levy to go up."

Ruth Lange, deputy county clerk, said the remaining 50 percent of the revenue generated by the county sales tax is intended to go toward projects that benefit the whole county.

The majority of it-80 percent-is assigned to the maintenance of roads and bridges. The remaining 20 percent is available to commissioners to designate for projects that benefit the county, according to Lange.

Among the regularly budgeted beneficiaries are the Marion County Fair and the Marion County Economic Development Council.

Lange said commissioners have also used the funds for other projects that arise, such as the purchases of ambulances and of vehicles for the sheriff's department.

More recently, funds have gone toward a voice-mail system for the courthouse and health department, computer software for the ambulance service and the base of the E911 tower.

"It depends on what kind of projects come up," she said.

-- Hillsboro revenue

In Hillsboro, the 1985 half-cent sales tax initiative was targeted for street and sewer repairs, according to Dalke.

"At the time, our streets were in horrible condition," she said. "Our philosophy was that all the people who drive the streets of Hillsboro should help pay to get them repaired. That meant anyone who came to town and, hopefully, while they were here, they'd spend some money and it would help repair the streets."

Revenue from both the local and county sales taxes continues to be funneled into the city's capital-improvement fund, Dalke said.

The council has defined capital improvements as projects "that will last and don't have another source of funding," according to Dalke.

As a result, the money does not go for such things as salaries or city vehicles, which are part of day to day-to-day operations.

"People need to understand that the money has all gone to make improvements to the city," she said. "I want things that will be here when my grandkids grow up. That's what my philosophy is."

(See sidebar for a list of recent projects.)

Marion revenue

Marion's three-quarter-cent sales tax that went into effect July 1, 2002, was designated for economic development-specifically, creating an industrial park.

The $1.274 million project has since been completed and the sales tax will continue until the project is paid off over a 20-year period, according to David Mayfield, city administrator.

Mayfield said he feels using a local sales tax for economic-development has been a good plan for Marion.

"I think people will appreciate it even more when we have some industries move into the park," Mayfield said. "And that will happen."

Philosophical issues

Dalke said she realizes that no one likes to pay taxes, in whatever form. But she feels a local sales tax is sometimes preferable to the property-tax option.

"I do know that very socially minded people object to sales taxes because they feel it hits the poorer harder because they don't have the money to invest in things you don't pay sales tax on," Dalke said.

"But there has to be a balance between what property owners pay and what people pay who use city services but choose not to be property owners-and some of that is choice; it's not necessarily that they can't do it.

"That's what I would say our philosophy is," she added. "We're hoping that the people who use (city facilities and infrastructure) help pay for it through a sales tax."

In a similar vein, Hillsboro augments its capital-improvement fund annually with about $200,000 revenue generated through the sale of electricity to local households and businesses.

"I think that's a fair thing to do because everyone pays electric bills in town," Dalke said. "Because we have that account, we have been able to do the things we've done in Hillsboro. With property taxes only, we'd never be able to do it."