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Archive for Thursday, April 12, 2007

Tax caution

City commissioners should take their time to evaluate the pros and cons of a proposed sales tax increase to boost Lawrence’s “quality of life.”

April 12, 2007

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Lawrence city commissioners are right to be cautious about a proposal to implement a 1-cent sales tax to pay for "quality of life" enhancements for the city.

The plan put forth by new Mayor Sue Hack calls for raising the sales tax for 10 years to pay for a new library, new recreation facilities, economic development initiatives and infrastructure projects. The new tax would raise an additional $12 million to $13 million a year and would have to be approved by city voters.

According to Hack, the sales tax is the only option to pay for the "kind of things we want : I'm not comfortable raising property taxes to the extent that we would need to."

And that is the crux of the situation: the relationship between what we "want" and what we "need."

Most local residents probably would agree that infrastructure projects - primarily city street repairs - fall under the "need" category. Some also would say the city "needs" a new library, although many would argue that such a need could be met for less than the $30 million price tag that has been placed on it.

The mayor said additional money is needed to aggressively market the community to prospective businesses, a move she hopes would attract new businesses that would ease the local tax burden. Exactly how would that money be used? For additional advertising? Buying land for industrial expansion? Additional personnel? If such an investment is made, taxpayers certainly have a right to expect dramatic results.

And a chunk of the sales tax would be used for the recreation projects that a segment of the community believes are desperately needed in Lawrence. That revenue, however, would be on top of the money the city already receives from the county's 1-cent tax. That tax has generated more than $30 million for recreation over the last decade and could be expected to generate that much or more in the decade to come. Both Lawrence officials and residents should look carefully at how the current recreation money is being used before making any decisions about how much more money is needed.

Hack's plan differs from the 1-cent sales tax proposal made by then-Mayor Mike Amyx last year in that it would dedicate no funds specifically to property tax relief. That also was a component of the sales tax the county passed in 1994.

Another consideration is that an 8.3 percent local sales tax would be the highest citywide rate in the state, not a particularly positive distinction. And even if a 10-year limit is placed on the tax, it seems very likely that in 10 years, the city will have found new urgent needs to justify the continuation of the tax.

Local residents should be glad that Hack's four fellow city commissioners expressed reservations about the sales tax at Tuesday's meeting. Perhaps the plan will prove to be a good one, but it deserves the close scrutiny of both commissioners and voters before it is accepted.

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