Property, sales tax numbers crunched / LJWorld.com

Archive for Saturday, December 16, 2006

$30M project would add more than 4 mills, or .15 percent in sales tax

December 16, 2006

Talk of a new city sales tax may re-emerge after city commissioners were told a proposed $30 million library would require at least a 4 mill property tax increase.

For some city commissioners, that news read too much like a Stephen King novel: frightening.

"That is way too much money, in my opinion," Mayor Mike Amyx said.

But the city report - the first one that details the potential tax implications of a new library - showed that a relatively small sales tax increase could pay for a new $30 million library over a 20-year period.

The report projected that a .15 percent sales tax - or the equivalent of 1.5 cents for every $10 spent - could generate the funding needed to pay the construction costs of a $30 million library over a 20-year period. But it would not cover the estimated

$1.55 million annual increase in operational costs for the larger library. That would require a 1.6 mill increase in property taxes, in addition to the new sales tax.

Under the property-tax-only option, the mill levy for the library would need to increase by 4.209 mills.

City commissioners haven't yet decided to build a new library. But the city's Library Board has recommended a public-private partnership proposed by members of the Fritzel family that would build a new 94,000-square-foot library - roughly double the size of the current building - on the site of the current post office at 645 Vt. It also would include significant amounts of private development on Vermont Street. Commissioners are scheduled to consider that recommendation at their Tuesday evening meeting.

Reader poll

Commissioners have repeatedly said that they wouldn't give final approval to the project without putting it to a citywide vote. But first they need to know the potential tax implications before they decide to support it at all.

City Commissioner Sue Hack said the new numbers don't erode her support for a library project, but it does make her want to consider a sales tax option instead of property taxes.

"I think putting all the burden on the property tax would be way too excessive," Hack said.

One mill is equal to $1 in property tax for every $1,000 in assessed valuation. The city estimates that it would need to raise the property tax rate by 2009 to begin paying for a library. It also projects a 5 percent annual increase in the community's assessed valuation between 2007 and 2009.

For an owner of a $150,000 home, a 4.209 mill increase in 2009 would result in an $86 per year increase in property taxes. That increase factors in a 5 percent-per-year increase in the value of a home, as projected by the city.

City Manager David Corliss said that commissioners could choose to fund the entire library, both the construction costs and the annual operating costs, entirely with a sales tax. Information on how much that sales tax would need to be, however, has not been determined.

Amyx had earlier proposed a 1 cent sales tax that would have been used for streets, infrastructure improvements and property-tax reduction. Amyx said if city commissioners choose to move forward on building a library, he hopes they'll consider some sort of sales tax proposal that would provide funding for several city needs and reduce the reliance on property taxes.

"We have several big-ticket items that people are talking about," Amyx said. "We really need to talk about what our priorities are, and how we can do everything in a way that is affordable to everybody."

Amyx said that he wasn't optimistic that the city would reach any decisions on the library project at Tuesday's meeting. He said a study session with the city's Library Board may be needed. He also said it may be unrealistic to think that a citywide election could be held on the project as part of the April elections.

Discussion

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16 December 2006
at 7:10 a.m.

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Sigmund (Anonymous) says…

Whatever plan the Kommission is going to move forward with, this is such a significant expenditure that it should be put to a vote by those that are expected to pay for it and use it.
16 December 2006
at 7:56 a.m.

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merrill (Anonymous) says…

Any new taxes that may surface groceries and prescriptions perhaps could be considered for exemptions.
16 December 2006
at 8:40 a.m.

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just_another_bozo_on_this_bus (Anonymous) says…

Sigmund, did you read the article? Yes, a public vote is planned— always has been.

I don't think the city has the option of excluding either groceries or prescriptions from sales taxes collected here. That'd have to be done by the state legislature.

I can't see why it makes much difference whether any new taxes are collected through sales taxes or property taxes— both are fairly regressive taxes that affect lower income folks more than those in upper income brackets.
16 December 2006
at 8:42 a.m.

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Informed (Anonymous) says…

Put the library and its cost to a vote of the people. Oh, wait, that may just happen, anyway, come April.
16 December 2006
at 8:44 a.m.

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KS (Anonymous) says…

Property taxes are paid whether you own or rent property. Property taxes are included in rental rates. Both the rich and poor pay. Some just more than others.
16 December 2006
at 8:58 a.m.

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budwhysir (Anonymous) says…

Here is the real political facts,

At this point we need to raise the tax to create a 30 million dollar income to build the building. This building need to be tall enough and long enough to house all of the politicaly correct books that have been and will be written over the next 30 years.

After we build this building, keep in mind that the average book runs about $25.00 and we will have a
very large building, (bigger than the current library?) to fill.
16 December 2006
at 9:43 a.m.

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tir (Anonymous) says…

My thanks to Sue and Mike for their reluctance to raise property taxes 4.2 mills. Putting the burden of funding the new library only on property owners would be unfair. I think a sales tax increase is a better idea—it will spread the cost around more. If everyone gets to use the public library, everyone should help pay for it, not just property owners.

16 December 2006
at 9:51 a.m.

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Informed (Anonymous) says…

Reality_Check, while no one has said there will not be a public vote on the library, no one has, specifically, said there will be. So, about your offer to shut up…

BTW, are you now the moderator of free thought and speech? A touch of your own advice should probably be inserted here.

Personallly, I think any plan to try to relocate the library to the downtown post office is ludicrous. A downtown plan that does not appropriately address parking issues is another waste of taxpayer dollars — sales, property or other.
16 December 2006
at 10:07 a.m.

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just_another_bozo_on_this_bus (Anonymous) says…

The only folks who would be largely unaffected by an increased property tax would be the homeless. And if you think the extra sales taxes collected on their purchases will fund the new library…. The focus by Amyx on reducing the property tax by increasing the sales tax is nothing but empty political grandstanding.

If we want a fair system of taxation, sales taxes should be cut to half of current levels, and food and medicine should be exempted. Residential properties should be exempt from property taxes on the first $100,000 in valuation. The state should then institute a revenue-sharing program with local governments on a progressive income tax to make up for the reduction in the sales and property taxes.
16 December 2006
at 10:12 a.m.

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Godot (Anonymous) says…

Lawrence leaders have to come to the realization that Lawrence cannot have both affordable housing and a luxury library.

The city budget is already short of funds for the basics like street repair and sewer service; to even consider spending $30,000,000 on this library is pure fiscal negligence.

And, the 4.2 mill is just a low ball estimate because it assumes a 5% increase in property values every year.

Apparently the city fathers and mother have not read the reports that the sales prices of houses are not increasing, in fact, many houses are selling below their appraised value.

Contrary to what Bozo states, the Kommissars do not need voter approval to increase the mill levy.

Here is a suggestion to the commission: increase the tax base, rather than the mill levy, before you commit the city to a luxury library/convention center. Since you cannot seem to attract businesses, Go out of your way to see that many, many more high value homes are built and sold, homes that will attract the kind of wealth to the city that can pay for the amenities the Bozos of this city seem to think they deserve.
16 December 2006
at 10:16 a.m.

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just_another_bozo_on_this_bus (Anonymous) says…

“Contrary to what Bozo states, the Kommissars do not need voter approval to increase the mill levy.”

I said no such thing.

“Go out of your way to see that many, many more high value homes are built and sold, ”

But if the rest of the city has to pay for the new infrastructure these McMansions need, then property taxes will go up, not down, regardless of whether we get a new library.
16 December 2006
at 10:28 a.m.

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Godot (Anonymous) says…

What would put more strain on the infrastrucure:

1 high value house with one family of 2 or 3 people per 1 or 2 acres, or several small houses, or townhomes, or, worse, an apartment building, with multiple families per acre?
16 December 2006
at 10:43 a.m.

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just_another_bozo_on_this_bus (Anonymous) says…

Are you talking about existing infrastructure, or new infrastructure? Do the residents of said property, however many, provide the funding for construction and maintence of required infrastructure, or do they need subsidization by other residents of the city?
16 December 2006
at 10:49 a.m.

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Godot (Anonymous) says…

The developers already build their own streets, sewers, etc., and include that in the price of the home. The taxes on a $1,000,000 house more than pay for that families' use of city services; that family's taxes would be subsidizing the repair of the crumbling infrastructure of old West, downtown and East Lawrence.
16 December 2006
at 10:54 a.m.

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Godot (Anonymous) says…

Speaking of taxes, the city should incorporate the many little franchise fees and user taxes (like for sewer) in the property tax. At least that way, these taxes would be deductible on income tax returns. As it is now, we pay the tax, and then get taxed on the money with which we paid the tax.

16 December 2006
at 11:09 a.m.

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just_another_bozo_on_this_bus (Anonymous) says…

OK, I'll ignore the absurdity of the notion that we'll attract enough $1 million dollar home buyers to magically pay for all of the operational costs of this city. (Though I have to wonder, where will all of the maids, cooks, nannies and garden boys live in this new Shangri-La you envisage?)

But if these magical new residents are going to be our saviors who pay for everything for us, under the current scenario, many things will not be included in the purchase price of their houses.

How many of those million dollars houses could be sold if they couldn't be hooked up to the new $68 million dollar sewage treatment plant that is necessitated 100% by growth that doesn't pay for itself. I guess they won't need parks, since they all have private parks for yards.

I guess they can also afford Hummers and Landrovers, which they'll need, because they won't have any arterial streets to feed their neighborhoods. Will they be OK with having the nearest fire station 5 miles away, since there won't be any nearby without the rest of the city paying for one for them. Same goes for police stations. And schools. And the list goes on.

Any equation that doesn't include all the variables is useless. But I'm sure you'll keep on trying.
16 December 2006
at 11:17 a.m.

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Godot (Anonymous) says…

Bozo, how do you figure it costs more to process the poop of a few people in million dollar houses than it does to process the poop of lots and lots of people squeezed into “affordable housing?”
16 December 2006
at 11:31 a.m.

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just_another_bozo_on_this_bus (Anonymous) says…

It doesn't. But if the people in the million-dollar houses aren't paying for the poop-processor, then somebody else is.
16 December 2006
at 11:45 a.m.

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Godot (Anonymous) says…

I am glad you brought that up. And where in the budget is the money to pay for that $78,000,000 sewer upgrade? And the $40 some million in stormwater and sewer upgrades needed in North Lawrence? And what about the money to purchase Farmland? And the homeless shelter? And the miles and miles of crumbling streets that need repairs? And the sidewalks? And now the multi-multi-million dollar library (not $30,000,000 - that is a number the library board incompetents made up, Fritzel didn't even provide numbers).

What I want to know is, what in the world were the Kommissars doing when they had their retreat, and their visionings? Why are we this far into the reign of the PLC, without having some priorities set?

Dadaism is barely acceptable in art; it is criminal when applied to governing a city.
16 December 2006
at 12:47 p.m.

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deec (Anonymous) says…

Without the unrestrained growth of the last 20-25 years, most of the projects on the table would not be necessary. Lawrence did not magically double in size during the terms of the current commissioners. You can blame the many pro-growth commissions of the past 20-25 years for them.
16 December 2006
at 1:37 p.m.

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Confrontation (Anonymous) says…

They shouldn't compare a great author's work (Stephen King) to some crappy idea in Lawrence. Stephen King is too talented to come up with such an idiotic idea.
16 December 2006
at 1:37 p.m.

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Godot (Anonymous) says…

But the PLC knew that the city faced problems when they took office; they have done nothing to fix the streets and sewers and sidewalks; nothing to improve the efficiency of the city government; have done nothing to bring relief to the taxpayers; instead they wasted their time and our resources on “visioning,” on consultants whose advice they do not heed, on unnecessarily luxurious projects that the citizens cannot afford and that are not even the responsibility of the city to provide. All this while doing everything in their power to discourage new businesses from locating in Lawrence.
16 December 2006
at 1:58 p.m.

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just_another_bozo_on_this_bus (Anonymous) says…

I'm sure glad I don't live in your alternate reality, Godot.

16 December 2006
at 3:44 p.m.

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KS (Anonymous) says…

The bottom line is that people keep screwing and babies keep comming. That equals growth (or in some folks minds, evolution). That's why they call it growth. I would prefer that to the opposite….loosing people and what jobs are here. Lawrence is growing, whether you like it or not. Do you folks think that the only growth in this country is in Lawrence? Get out of town and travel a bit. Get used to and accept it. Plan for the future as best you can and quit complaining.
16 December 2006
at 4:03 p.m.

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just_another_bozo_on_this_bus (Anonymous) says…

Who are you talking to, KS?
16 December 2006
at 5:38 p.m.

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monkeyhawk (Anonymous) says…

Very eloquent, Godot.
16 December 2006
at 5:40 p.m.

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just_another_bozo_on_this_bus (Anonymous) says…

How's things in alternate reality world, monkeyhawk?
16 December 2006
at 5:52 p.m.

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monkeyhawk (Anonymous) says…

Way to go straight for the (quite certainly inaccurate) ad hominem attack, boozo.

You must be getting confused with over 4100 posts - I am actually the one who declared that you are from an alternate reality quite a while back. Hard to maintain originality when you do the same thing over and over and over, eh?
16 December 2006
at 8:56 p.m.

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Godot (Anonymous) says…

Welcome back, monkeyhawk.
16 December 2006
at 9:04 p.m.

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Marion (Marion Lynn) says…

MH:

How you?

How things?

Thanks.

Marion.
16 December 2006
at 9:20 p.m.

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just_another_bozo_on_this_bus (Anonymous) says…

It's not an ad hominem attack. Godot listed off a long list of things that he apparently imagined that happened, or didn't happen. I generously assumed he lived in an alternate reality rather than an imagined one.

I was equally generous towards you.

You still didn't answer my question, but it's just a silly blog-site, so don't feel obligated to answer on my account.

How many posts do I have now? (I'm glad you're keeping track for me.)

17 December 2006
at 11:43 a.m.

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Marion (Marion Lynn) says…

This city found a solution to its street and sewer problems.

It doubled property taxes!

http://www.wgal.com/news/10532517/det…

“Borough More Than Doubles Property Taxes

POSTED: 8:45 am EST December 14, 2006
updated: 10:03 am EST December 15, 2006

Property taxes are going up — way up — in Camp Hill, Cumberland County.

The Borough Council approved a 2007 budget Wednesday night that more than doubles property taxes. The new rate is 3.8 percent.

That means a homeowner with a $100,000 home would pay an additional $200 a year.

The council said the borough needs the money for street and sewer repairs.”

This could be Lawrence!

Thanks.

Marion.