Property tax increase favored over sales tax for development goals

Local leaders looked hard Wednesday for ways to avoid asking voter approval to raise $20 million over the next 10 years for open space and economic development projects.

Members of the Lawrence-Douglas County Economic Development Board generally were cool to the idea of a 1/4-cent, countywide sales tax to fund projects to preserve open space and add new industrial property to the county. The reason: A sales tax would require a countywide election.

“For me, this is an issue of risk versus importance,” said County Commissioner Charles Jones, who also is a member of the economic development board. “I think this program is essential for the long-term future of our community. I’m very wary of the risk (that) something this important will fail if we put it to the voters.”

Instead, board members said they wanted to explore the possibility of a 2 mill property tax increase to raise the $20 million, which could be used to fund projects such as the cleanup of the vacant Farmland Industries site and the construction of a pedestrian bridge over the Kansas River.

The mill levy increase would not require a public vote.

“To me, the projects we’re talking about are community obligations,” said Mike Maddox, a local banker and board chairman. “It is up to the city and county commission to step up and say we’re going to fix this.”

A mill is $1 in property tax for every $1,000 in assessed valuation. For the owner of a $200,000 home, a 2 mill increase would increase property taxes by $46 per year.

The idea of preserving open space and creating additional industrial development has been discussed for the past several years by the county-appointed ECO 2 board and the city-county appointed economic development board.

Mayor Boog Highberger, a member of the economic development board, said a property tax increase was slightly more palatable than raising sales taxes.

But Highberger said funding is needed because the lack of industrial or high-tech jobs contributes to Lawrence becoming more of a bedroom community.

“If we’re going to have a balanced tax base in the future, we have to add some industrial space,” Highberger said. “And if we are going to have a good quality of life, we have to preserve open space.”

City Manager Mike Wildgen and County Administrator Craig Weinaug put together the projections that suggested either the mill levy or sales tax increase would be necessary to raise $20 million over 10 years. The ECO 2 group had previously mentioned using a combination of other sources of funding such as a mortgage registration tax, impact fees, and tax increment financing.

But administrators said many of the options weren’t yet allowed under state law, were slow to produce revenue or simply wouldn’t generate enough money.

“As much as we would want to wish otherwise, these are probably the revenue streams we’re dealing with,” Weinaug said of the sales and property tax options. “They are both problematic.”

City and county commissioners are scheduled to meet with the economic development board on March 15.

In addition to the Farmland Industries project, money could fund a 300-acre business park near the Lawrence Municipal Airport. On the open space side, the money could be used to fund protection of the Black Jack Battlefield site near Baldwin; preservation of native prairie near Lone Star Lake; preservation of a native forest near Baldwin; and to build a pedestrian bridge over the Kansas River, which would be part of a larger trail system connecting the Kansas and Wakarusa rivers.