At least one Ames City Council member believes students are being cheated by a city budget that will use sales taxes to reduce property taxes for the upcoming fiscal year.

The city council took $230,000 of sales tax revenue, originally intended to help improve the community, to lower property taxes.

Councilman Matthew Goodman said this move shortchanges many students because although they pay sales tax, they do not directly pay property taxes. The move also misuses the community betterment funds, he said.

“To use the money this way does not follow its intended purpose,” Goodman said.

According to the 2004-05 Planning Budget, Ames has a projected revenue of $5.3 million from a local sales tax.

Voters approved a 1 percent local sales tax in 1986, with the criteria that 60 percent of the proceeds would contribute to property tax relief and 40 percent would go to “community betterment” — a term only defined as “including human services and arts agencies,” according to the Planning Budget.

But in constructing the budget, City Manager Steve Schainker pulled $230,000 from the community betterment portion of the fund to the general fund, which Goodman said was unwarranted.

At the City Council budget wrap-up meeting last week, more than $78,000 was added to city funds with the elimination of public access Channel 16 and the increase of two fees.

Councilman Steve Goodhue motioned that those funds be applied to the general fund, so property taxes, set in the initial budget at 3.28 percent, could be lowered.

A 2.9 percent property tax rate, achievable with the $78,000 addition from the budget cuts, was the closest the council could come to an ideal rate, Goodhue said.

“We had a 1.9 percent growth in taxable valuation this year,” Goodhue said Monday. “I believe the tax increase ought to mirror that.”

Goodman objected to this idea, arguing the $78,000 should be reapplied to the community betterment fund. The community betterment fund is derived from sales tax — which everybody pays, Goodman said.

Renters of non-university (not owned by the state) property pay property taxes indirectly through their landlords, who can set rent based on their expenses. Renters of state owned residence hall rooms on exempt property would not be benefited by property tax relief.

If the sales tax funded community betterment money is put into the general fund to lower property taxes, which not all Ames residents pay directly, those not paying property taxes are getting shortchanged, he said.

Goodhue’s motion was passed at last week’s budget wrap-up meeting, with Goodman casting the one dissenting vote.

There are projects in the budget which could be considered community betterment, Ames Mayor Ted Tedesco said.

“The general fund does a lot for community betterment,” Tedesco said. “Streets, sidewalks and bike paths are all part of community betterment.”

Goodman disagreed.

“I believe community betterment should provide for the higher human element of life — not streets, but parks and art,” he said.