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Archive for Wednesday, July 26, 2006

Mayor proposes sales tax

1-cent increase would pay for new roads, sidewalks, drainage

July 26, 2006

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Mayor Mike Amyx wants voters to approve a new 1 percent, 10-year sales tax that would give the city $120 million to repair streets, reduce property taxes and address infrastructure issues.

Amyx made the proposal - which also would include money for sidewalks, North Lawrence drainage improvements and a unique "city endowment fund" - late Tuesday evening as city commissioners struggled at their weekly meeting with the idea of raising the city's property tax rate for the 2007 budget.

"I think we're at the point that we're either going to have to have a property tax increase or find another stream of money," Amyx said. "I think we really have to discuss this (sales tax) now. We have to have a long-term plan to take care of what I consider failing infrastructure."

Any new citywide sales tax would require voter approval. Amyx did not propose a specific date for an election, but he also did not rule out putting the issue on the November general election ballot.

Amyx's fellow city commissioners stopped short of backing the idea, which would be necessary before it could be placed on a future ballot. Instead, commissioners expressed guarded interest.

"I want to congratulate the mayor for his willingness to do what people are elected to do, and that is lead the discussion," City Commissioner David Schauner said. "I'm more than intrigued by the mayor's suggestion. I think it deserves some serious discussion and some public debate."

Commissioner Boog Highberger expressed the most serious concerns about the idea, citing the effect a higher sales tax could have on low-income residents.

"I want to make sure that we run through the numbers and see how it affects different types of families," Highberger said.

Sales tax issues also generally are viewed to have significant effects on businesses that sell large-ticket items such as automobiles, furniture and other goods that consumers may be tempted to drive out of town to buy.

Up to 8.3 percent?

A 1 percent sales tax increase would raise Lawrence's total sales tax rate to 8.3 percent.

"I know we're going to have to go through an education process before we would put it on the ballot," Amyx said.

Commissioners indicated that they would want to discuss the idea of putting the issue on a ballot at a future City Commission meeting but set no specific date. Next week's meeting already has been canceled. Commissioners next meet on Aug. 8.

Specifics of Amyx's plan look like this:

¢ The 1 percent tax would automatically expire or "sunset" after 10 years.

¢ Based on current projections, a 1-cent sales tax would generate about $12 million per year, or more than $120 million over the 10-year period.

¢ About half - or $60 million - of the sales tax revenue would be dedicated to rebuilding city streets that have been rated as unacceptable by a city study, adding sidewalks to areas of town where gaps currently exist and tackling millions of dollars in stormwater drainage improvements for North Lawrence.

¢ The remaining $60 million would be used to establish a city endowment fund. The city would use the $60 million in principal to invest in interest-bearing accounts. Annual interest payments on the accounts could be used to fund street maintenance and other issues. Amyx is proposing that the endowment fund also come with an ordinance that would prohibit city commissioners from tapping into the fund's principal, except in city emergencies that would require a supermajority vote of the commission.

¢ The new sales tax money would allow the city's property tax rate to be reduced by an undetermined amount, although Amyx suggested upward of 6 mills.

Mill levy increase

Amyx proposed the sales tax after commissioners struggled this month with a recommendation from interim City Manager David Corliss that the city's property tax rate be increased by 0.98 mills to help fund an increase in street maintenance.

The mill levy increase, when coupled with expected increases in assessed home valuations, would amount to an extra $50 to $60 per year in property taxes.

Commissioners agreed to proceed with publishing the budget as recommended - with the mill levy increase - but they aren't scheduled to give final approval to the budget until Aug. 8. Commissioners still could choose to reduce the budget and the mill levy increase at that time.

Comments

lunacydetector 8 years, 3 months ago

wasn't there a sales tax hike back in the early to mid 1990's that had a sunset clause that the city commission extended already or did they just make it forever? i think it was for funding city parks and hiring more police. maybe my memory is failing with my old age...but for some reason that tax hike sticks in my craw.

i have a feeling this 1% will remain forever, regardless of some sunset clause 10 years down the road. nobody will remember it, kind of like how i am vaguely remembering the previous sales tax hike 10 years or so ago.

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Kelly Powell 8 years, 3 months ago

I'll take the 1 cent sales tax over them cranking up property tax everytime there is money needed....This ,at least, shares the misery with everybody.

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Jersey_Girl 8 years, 3 months ago

There are only seven states that average at or above 8% sales tax: Alabama, Arkansas, Louisiana, New York, Oklahoma, Tennessee and Washington. Kansas's average is 6.95%. Personally, I don't feel a need to jump a full 1%.

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Kelly Powell 8 years, 3 months ago

They could make it a .7 so it would be an even 8......

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Jersey_Girl 8 years, 3 months ago

And, if I'm reading the chart correctly, the Kansas state sales tax is only 5.3%. We're already over by 2% (yeah, I know, most you can do the math). BTW, if I need to clarify my previous post, that was the county and city averages at or above 8%. I say raise it .2% to make it an even 7.5 and then everyone can also easily figure out tips by simply doubling the sales tax.

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erichaar 8 years, 3 months ago

"Up to 8.3 percent?"

NO!!!!!!!!!!!!!

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monkeyhawk 8 years, 3 months ago

I would like my neighbors to fund a savings account for me...

Doesn't the city already have a rainy day fund, or has that been frittered away? I'm not sure I trust the almighty powers to retire the sales tax when it is due, to reduce my property taxes, or to use our existing taxes prudently, let alone an EXTRA 12 million. What is happening with our tax dollars right now that regular city services cannot be performed without another windfall tax?

As I was watching the city commission meeting last night, I realized the difference between JoCo & DgCo. In the cities in Johnson County, there is no sacred place. All areas, residential and commercial, are equally important. It seemed to me in the discussion of the post office relocation, that our leaders have the belief that there is nothing else in Lawrence other than downtown. The rest of the city exists only to fund Compton's water sprinklers and beautification projects. I, like Shauner, rarely, if ever, visit downtown. There is a whole 'nother world out here in Lawrence, and we really do count, too.

Maybe our newly elected city commission should decide matters that will affect us for years to come.

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dviper 8 years, 3 months ago

Absolutely NO new or increased taxes!

Everyone, including businesses has been tightening their budgets and reducing spending for several years now. But reducing budgets and spending at the City of Lawrence is an unknown concept, where the only solution is continual tax increases and spending. The tax and spend attitude is prevalent in all 5 city commissioners. The waste and misappropriate spending of hard earned taxpayer dollars has got to stop.

Hopefully the citizens of Lawrence remember this at the next local elections, and get out and VOTE.

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jafs 8 years, 3 months ago

It is interesting to read the comments today - I am in agreement with those who are concerned about raising taxes. The current city budget is approximately $10million/month. That seems like it should be enough to cover basic city services and maintaining infrastructure - why isn't it working? There must be a variety of waste/poor decisions at play here somewhere. That doesn't mean a slight increase isn't necessary though. And, finally, I'm glad our mayor wants to put this to a vote rather than just raising property taxes!

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nytemayr 8 years, 3 months ago

Raise sales tax and it will be permanent. Lawrence is not growing, expensive to live in, has low wages and few jobs. The price of commuting is raising. housing. and sales tax are cheaper in Johnson County with better jobs, entertainment and shopping.

Raise the sales tax and get more parks, services, flood control, turnabouts and art, fewer jobs, a smaller tax base and a shrinking population.

Raise the sales tax. Makes sense to me

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lunacydetector 8 years, 3 months ago

NOBODY could answer my question about the sales tax hike we had 10-12 years ago that never went away like it was supposed too.

is it time to start cutting city staff, especially when staff has tripled in 15 years and lawrence's population has gone up 25%? stop with the fancy supervisors cars/trucks/sport utilities.

stop putting in $900,000 roundabouts ! there are so many common sense solutions. i hate living in a tax and spend liberal community. i sure hope the conservatives (silent majority)come out of the woodwork come next election.

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Confrontation 8 years, 3 months ago

Yet another reason to leave Lawrence. There's nothing here that's any better than Johnson County, unless you enjoy being assaulted by the homeless. Oh, yeah, I guess there is the KU Men's Basketball Team.

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Sigmund 8 years, 3 months ago

Use your existing sales taxes and live within your budget. Quit doing stupid stuff like $75 million librarys, roundabouts, and subsidizing unused buses first! Increase the sales tax and Ill just avoid paying it. Sure you may get a bit more out of me when I buy a coffee but for consumer goods Ill buy over the internet and my next car Ill buy out of town.

Higher taxes is not the answer. The Federal Government reduced income taxes and their revenue has never been higher. You may think it is counter-intuitive, but raise sales taxes to 17% and see how much you collect or 170%. The fact is, every time you raise taxes you encourage more people to avoid paying taxes and they will find legal ways to avoid it.

Higher taxes is not the answer. Prioritizing the budget is. I know its hard to tell people "no we can't afford it" and it may seem easier to raise everybody's taxes and then try and "buy" votes come election time by promising ever more goodies, BUT you're not fooling anyone.

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Sigmund 8 years, 3 months ago

Oh and to the ", Lawrence, Love it or Leave It" crowd. Nope I'm going to "Love it and make it even Better". Im not going away :p

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OldEnuf2BYurDad 8 years, 3 months ago

By noon, every discussion degenerates into a series of personal attacks.

"Idiot!"

"I know what you are, but what am I?"

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OldEnuf2BYurDad 8 years, 3 months ago

I'm 42 years old, and pretty sure I've never seen a sales tax increase actually "sunset".

In 10 years, we'll be paying 10%. Any of you who say "Yes", need to realize that this will be permanent. Are you OK with "forever"?

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badger 8 years, 3 months ago

I would think that Mayor Amyx should have learned from years of being a businessman that if you cannot meet your expenses, there is an alternative to raising your prices, and it's called 'reducing your overhead'.

Everyone pays for the things they need to run their organization and sets prices so that they can keep the organization running (and themselves running it successfully). As consumers, we balance quality of goods and services vs price, paying as little as we can get away with for as much as we can afford to buy; in other words we vote with our dollars and our patronage to support the best value.

If all the barbers on the street have 3.50 per haircut in overhead, and they charge five bucks for a haircut of approximately equal quality, who's going to make more: the guy who reduces his overhead twenty-five cents a haircut for a profit of a buck seventy-five per cut, or the guy who raises his price fifty cents for a profit of two dollars a haircut?

Sometimes, you have to raise your price, but you shouldn't do that until you've exhausted all the reasonable options for lowering your overhead.

I'm surprised that someone who ran a successful business for so long is quicker to raise prices than to really make a substantive effort at reducing overhead.

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Godot 8 years, 3 months ago

Lunacydetector wrote: "NOBODY could answer my question about the sales tax hike we had 10-12 years ago that never went away like it was supposed too."

The bonds that sales tax funded were for the pool and Holcomb, part of the parks and rec improvements in the early 90's. Those bonds will be paid off this year, so the commissioners should do the honorable thing and sunset that tax, as was promised when it was presented to the voters.

But, no, our not-so-honorale commissioners have already decided not to sunset the tax, and plan to use it for other projects. Now, they want us to believe that they will add another 1 cent tax, for a "temporary" project, and that it will "sunset." That will never happen, not here.

The part about this proposal that I worry about the most is the "endowment trust." That is the way they are going to fund the library, just you wait and see.

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Godot 8 years, 3 months ago

"Higher taxes is not the answer. The Federal Government reduced income taxes and their revenue has never been higher. You may think it is counter-intuitive, but raise sales taxes to 17% and see how much you collect or 170%. The fact is, every time you raise taxes you encourage more people to avoid paying taxes and they will find legal ways to avoid it."

This new tax will put Lawrence right behind Roeland Park at 8.65%. Next down the line are Neodesha (also 8.3%) then DeSoto and Edgerton.

It will be easy to avoid paying the higher tax. Shop anywhere else in Kansas, other than Roeland Park, De Soto, Edgerton, Neodesha or Lawrence. Just don't have them deliver the product to you here.

My question is, how long before the school district decides it needs more money and tacks on another 1 cent in sales tax? The new school finance formula allows for that, doesn't it?

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badger 8 years, 3 months ago

Marion said:

"I learned a lot about reducing overhead when I closed the doors on my office and moved to a cave in a ditch hidden behind shubberies and guarded by rabbitts and wolves who seem to get along fine in this context.

Not only am I difficult to find, thus keeping way THEM; the retail public, I reduced my overhead by nearly 85%."

Folks, someone call the Department of Defense. I believe I've located Osama bin Lawrence.

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Janet Lowther 8 years, 3 months ago

NO MORE SALES TAX!

Another percent of sales tax will have me very intentionally shopping in Topeka a LOT more.

7.3% is too high already: At least property tax increases are tax deductible.

IIRC Texas' sales tax is only 8% and they don't have an income tax. . .

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Bruce Bertsch 8 years, 3 months ago

Income for goverments rise whether taxes are raised or lowered. If you look at the federal guvmint as currently constituted, it is a borrow and spend not tax and spend guvmint. In reality, it would be more effective to tax than borrow as you don't pay interest on tax revenues.

As with other municipalities, much of the trouble here is quite simple. Fee and license revenue from development is not sufficient to pay for infrastructure. Therefore, city funds must be used, thus depleting funds available for maintenance. If developers want/need new intersections they should pay for 100% of the cost. If a subdivision needs new sewer infrastructure, let the developer pay. Obviously it will be passed on to the purchasor, but the city got paid. If the sidewalk is cracked and broken in front of your house, you should be given the option of self repair, or pay the city for repair.

While there is some excess in any budget, to bitch moan and yell everytime taxes are increased is silly and counterproductive. And, by the way, roundabouts are inherently much safer than stop signs or stop lights.

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Jersey_Girl 8 years, 3 months ago

Does it worry anyone that the appropriate amount isn't already in the budget for road maintence? And yes, I skipped a bunch of posts again in the name of budgeting my time (BAD Jersey, BAD Jersey!). But half the revenue from the sales tax increase is just for a savings account. While I'm all for having an emergency fund to dip into, I do think that saying, "Oh, let's raise the sales tax in order to repair roads that our townspeople feel need fixing. And while we're at it, let's double the amount we're raising it so we can have a savings account" kinda chaps my ass.

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fletch 8 years, 3 months ago

jrlii: Texas' average sales tax is around 8.1% now (varies by town). It might sound nice that we don't have state income tax, but that is passed on with a lot of other stuff. Taxes on cigarettes and alcohol are through the roof. Luxury taxes are extremely high. Property taxes have been skyrocketing, leading to the near collapse of the tax and education systems a few months ago. Almost all of our major infrastructure projects are being paid for with loans that we can't pay back, so many major highways are becoming tollways. Hell, you can't even get around Dallas anymore if you don't buy a tolltag.

It's nice to cut one less check in April, but you pay for it every other day of the year.

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neopolss 8 years, 3 months ago

There would be plenty of money for these projects if the city commission focused SOLELY on these projects. If you dump the extra expendatures, like roundabouts, artworks, pesticide free measures, and libraries, you would find plenty of money to fix infrastructure.

Roundabout = $1 million Stop sign = $30,000

I can live with stop signs a bit longer to have better roads to drive on. I have had to buy all new tires for each car in this town, simply due to the many potholes around.

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benm024 8 years, 3 months ago

Why don't the commissioners just vote it in themselves like they do for everything else they decide in this town. What, they are actually letting the people vote on this one? What a concept.

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Godot 8 years, 3 months ago

We need to see some deep cuts in funding of amenities and entitlements before we consider a tax increase for necessities.

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Jersey_Girl 8 years, 3 months ago

fletch - this little hike would take our sales tax above Texas' average and we DO have a state income tax.

What about some sort of construction tax? Apartment complexes have been popping up all over Lawrence like zits on a teenage girl's face two days before prom.

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dviper 8 years, 3 months ago

moderationman-

In response to your posting earlier at 1:49 pm.

In all new developments, ALL infrastructure costs are paid for by the developer. The city pays for NOTHING:. not a penny. This infrastructure plus all street land and rights of way are given to the city for FREE when completed.

The 'no growth' proponents always forget this when talking about growth and taxes. From a conservative estimation, during the last 10 years developers have given the city over 235 million dollars worth of FREE infrastructure. But the 'no growthers' still think that growth doesn't pay for itself.

Most intersections are paid for through benefit districts. Again no taxpayer money is used. The adjacent land owners or benefit district participants usually pay for 100% of the cost.

I don't believe roundabouts are safer than stop signs or traffic lights. During the last 3 years, I've had more 'near' accidents at roundabouts than at stop sign or traffic light controlled intersections. Personally, I'd rather lower the speed limit and use yield signs instead of stop signs. It would be much more cost effective and accomplish the same goal.

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tcoup 8 years, 3 months ago

Can someone explain to me why city employees continue to pick up our refuse? Has outsourcing this to Defenbaugh or Waste Management ever been looked at? It seems to me that we might be able to reduce the cost of trash collection and actually get some additional services in the process (e.g. Pick up of recylables AND yard waste on Mondays).

It's just a thought, but not neccesarily a good one :)

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Wilbur_Nether 8 years, 3 months ago

I'm willing to consider the $12 million in savings idea. Which $12 million did people have in mind?

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jayhawks71 8 years, 3 months ago

"Stop sign = $30,000"

Wow, I need to get in the stop sign business. I will give the city stop signs for $27,500 each. For a cool 100k, I will give you a set for a 4-way and throw in the little "4-way" tags. Give me 10 4-way intersections and I will throw one intersection for free (44 stop signs for a million bucks!). Just let me know. I will dig the holes as well. Any takers?

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Godot 8 years, 3 months ago

Wilbur-Nether wrote: "I'm willing to consider the $12 million in savings idea. Which $12 million did people have in mind?"

Gee, last week, they were just looking for an extra $1,000,000; now they are asking for an additional $12 million per year for the next 10 years. And, if you add in the 1% tax that was supposed to sunset, but that is not going to, then they are really asking for an additional $24,000,000 per year, forever.

That is quite an increase in spending, I'd say.

This is how they are going to get the money for the new library without having us vote on a library. Quite cunning, actually. I can hear their little minds churning..... "hmmmmm, seems there is some opposition to spending $70,000,000 on a new library......I know, let's ask for a tax increase for a savings account, we'll call it an 'endowment fund," that is to be used for special projects. We just won't tell them that the "special project" is the library! They will fall that one, yeahhh....."

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Sigmund 8 years, 3 months ago

"I'm willing to consider the $12 million in savings idea. Which $12 million did people have in mind?" Ummm, send me a budget and I'll even provide the red pen, no charge.

The "T", anything with "homeless" other than "more jail cells for", and even ("horror of horrors!!!!) lay offs of city personel. When was the last time the city reduced its workforce? Are you telling me a Lawrence couldn't afford a 3-5% reduction of middle level management?

The problem is, as you know, the City Kommission already spent on their pet projects. It's hard to sell $12 million of used roundabouts on Ebay, or so I have been told. The chickens have come home to roost, the milk has been spilt, and the water has flowed under the bridge. NOW YOUR ASKING US TO SHUT THE BARN DOOR? We've been screaming its open for the last two years!

Election time is just around the corner and three of the five are up for re-election and those three are the worst offenders. But since they will have to face the voters they are unlikely to approve a tax hike. I can see the slogans now, *"Vote the PLC!! Born Again Fiscal Conservatives Every One of Them!!* Don't be fooled, you are only safe for just one year folks. This is a critical and pivotal election coming up Lawrence. It may be the last chance you have to free yourself from the Socialistic Fascist Lunacy that is the Lawrence City Kommission.

In the mean time if you want to RASIE Tax Revenues how about LOWERING Sales Taxes. Welcome to beautiful downtown Lawrence where we have lowest prices, I mean sales taxes, in the State! How many people would come to Lawrence from Topeka and Kansas City for their major purchases? The problem is, of course, you might have to finish the SLT.

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monkeyhawk 8 years, 3 months ago

Where are bozo and merrill on this topic? These are your guys... hasn't merrill been screeching about higher taxes lately? What bit of witicism might bozo enlighten us with?

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anonimiss 8 years, 3 months ago

How much are they getting for raising the gas and electric franchise fees?

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Jersey_Girl 8 years, 3 months ago

"Now the revenue man wanted Grandaddy bad He headed up the holler with everything he had It's before my time but I've been told He never came back from Copperhead Road"

Marion - what song is that and who is by? It strikes a chord, but I can't remember.

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just_another_bozo_on_this_bus 8 years, 3 months ago

BTW, it's just a hunch, but my guess is that Steve Earle would find most of Marion's posts thoroughly disgusting.

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anonimiss 8 years, 3 months ago

http://www.lawrenceks.org/budget2007/cm_rec_budget/street%20maint%20from%20reserve%20funds.html#fund

This says that the city is increasing street funding from $5 million to $6 million, and staying at about that level. They need an extra $6 million increase in taxes to pay for a $1 million increase in expenditures? Doesn't sound right to me. $5 million in 'other' projects will get through each year that couldn't otherwise. They're passing off waste spending as street repairs to try to get more money. Wise up!

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monkeyhawk 8 years, 3 months ago

Amyx is your guy, isn't he monkeyhawk?

Actually, I did vote for him, begrudingly. There weren't many choices after I eliminated three of them.

BTW, bozo, I knew you were out there....

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Jersey_Girl 8 years, 3 months ago

Solsken - excellent point. I've seen it done that way, as well. It's amazing how quickly it gets done that way. It's like the Street Fairy came through!

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LiberalDude 8 years, 3 months ago

I agree with everything Reality_Check said. I think everyone here is sick of Marion spouting off about Lawrence. Go blogg somewhere else like Ilovegodandfredphelps.com.

FWIW- I'm in support of the Amyx sales tax increase. Let the out of towners who visit pay their share of fixing the roads.

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Godot 8 years, 3 months ago

"Let the out of towners who visit pay their share of fixing the roads."

Great attitude, Dude. Take it to the next level, and charge a 10% visitors tax on hotels and motels and everything sold at bars. That'll help tourism in Lawrence grow.

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jayhawks71 8 years, 3 months ago

Ultimately, collectivism sucks.

Taxes NEVER sunset, unless that sunset is in Alaska during 6 months sun.

Here is the simplest way to undertand how government works: Government takes something you have (money, property, freedom) in the name of something else (poverty, war, terrorism) and says, "once we have problem X licked, you will get your sacrifice (see above) back." Once governmetn takes, it never gives it back to those that it took from. What they have taken becomes the status quo and they will find more ways to take and spend.

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LiberalDude 8 years, 3 months ago

"Great attitude, Dude. Take it to the next level, and charge a 10% visitors tax on hotels and motels and everything sold at bars. That'll help tourism in Lawrence grow."

Godot- do you really think that average tourist (women from JoCo) is going to quit coming to Lawrence because our sales tax went up a penny? Get real.

Marion- I think I might actually agree with you about the national sales tax. I just feel dirty now.

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