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Archive for Thursday, June 18, 1992

SALES TAX RECEIPTS BUOY CITY FUND

June 18, 1992

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An ice-cream cone here. A cherry red half-ton pickup there. It all adds up.

Lawrence's 1 percent sales tax is bringing more money to city coffers this year than expected, said Ed Mullins, city finance director.

The city collected $2,530,722 from its sales tax in the first five months of 1992. "That's about $278,800 more than for the first five months of last year," Mullins said.

At this pace, Mullins estimates the city could collect a little over $6 million from its sales tax for the year. In its 1992 budget, the city estimated it would collect $5,755,000 in sales tax receipts.

Dollars from sales tax help fuel the city's $12.5 million general fund, which is used to pay for day-to-day operations of the city, including police and fire service.

CITY SHOPPERS pay a sales tax of 5.9 percent. Of that, the city levies 1 percent; the remainder is levied by the state.

Any sales tax money the city receives over the amount budgeted for the fund will roll over into next year's budget, Mullins said.

"The more we have this year, the less we'll need next year," he said. "We do try to keep the mill levy down."

The city may need all the extra sales tax revenue it can get. Recent refunds on successfully appealed property valuations and a shortfall in fees the city receives from the natural gas utility may gobble up the excess.

As natural gas use dropped during the warm winter, so did the portion the city takes from Kansas Public Service revenues for allowing the company to use public land to install and provide its services, called a franchise fee.

IN ADDITION, KPS customers have received refunds on excessive rates they were charged last year, which will result in an $82,725 loss in franchise fees.

All told, the two factors have chopped about $110,000 from the $500,000 the city expected for gas bill revenues.

The level of the general fund is dipping further due to recent refunds in property taxes.

Businesses and residents can appeal the valuation of their property. If the valuation is adjusted, property owners receive a refund on excess taxes from the time they appealed. The city is responsible for paying its portion of the refund.

The city has seen its property tax revenues reduced by about $90,000 during this year due to the refunds, Mullins said. About 20 percent of that was meant for the general fund.

MORE PROPERTY tax refunds are anticipated in the future, Mullins said, but the sales tax should cover them. "Between property taxes and franchise fees, we're running pretty close," he said.

Mullins attributed the jump in sales tax dollars to steady increases in retail development and population.

"It's tough to say where exactly, but you can see it certainly in the popularity of Riverfront Plaza," Mullins said. "I think you can see it in the increase in housing. Overall population increase is part of that."

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