Members of a Lawrence Chamber of Commerce group said Tuesday they likely will ask Douglas County commissioners to put a quarter-cent sales tax increase on the November general election ballot to fund industrial development and open space preservation efforts.
The tax increase would generate an estimated $2 million a year for the ECO2 group's goal of generating 12,000 new industrial jobs during the next 10 years and preserving prime environmental, scenic and historical property throughout the county.
"It's a tough time economically to be asking for this, but this is the time to make the investment for our community's future," said County Commissioner Charles Jones, who is also an ECO2 member. "I think this is a question the public has the right to answer. It may be tough to do, but not doing anything may be even tougher for the community in the long run."
Money collected from the tax would be split equally between industrial development and open space preservation.
An eight-member board appointed by the county commission ultimately would have authority over how the tax revenues were spent, according to ECO2's plan.
The sales tax proposal comes at the same time Gov. Bill Graves is seeking a quarter-cent increase in the statewide sales tax, in addition to increased taxes on motor fuels, cigarettes and vehicle registrations. But ECO2 Chair Kelvin Heck said he has sensed some enthusiasm from community members about ECO2's plans.
"I've had a number of people in the development community tell me that they think this makes sense," Heck said. "There's a large education process that needs to be done, but I think people will listen to us."
Melinda Henderson, a Lawrence resident who has been following the group's more than two years of deliberations, told members Tuesday that some will question the group's tax choice.
"Be prepared for some discussion from the community that a sales tax is regressive, especially in this state," Henderson said. "People will wonder how you can ask poor people to pay an additional sales tax when they have to pay for sales tax on food."
Retailers of large-ticket items also said they have some concerns about a sales tax increase.
"In this economy, I'd hate to see any price added on to any item," said Gary Bennett, general manager of Laird Noller Automotive. "Any increase right now probably isn't real good timing, but I'm not real familiar with this group's cause, so I would want to learn more about it."
Bennett said the average sale price for a new car is now around $20,000. A quarter-cent sales tax increase would add $50 to the cost.
Jones said the group decided to pursue the sales tax increase because many property owners saw their tax bills increase by 25 percent or more last year.
In addition to winning approval from the county commission, the tax increase proposal also will need approval from state legislators before it can be placed on the ballot. The legislative vote is needed because the county has reached its maximum 1 percent for a countywide sales tax.
Municipalities can ask the Legislature to exempt them from the 1 percent maximum, and roughly 60 cities and counties have received that exemption in the past, Jones said.
Each city government in the county also will have a decision to make on the tax increase. City governments can't stop the initiative from going to the ballot, but they can choose to have their portion of the resulting revenue go directly into their coffers rather than be turned over to the ECO2 group.
The county instituted its 1 percent sales tax in 1995.
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