10-year sales tax increase on table

Initial proposal called for five-year plan

Think longer.

Support built among city commissioners on Monday for a plan to ask voters to approve a sales tax increase that would sunset after 10 years, rather than after five years as previously proposed.

“I think we have needs that just exceed what we can do in five years,” Mayor Sue Hack said.

Commissioners Rob Chestnut and Mike Amyx also both said they were open to a new half-cent, 10-year sales tax. Amyx originally had proposed the five-year plan.

“It is negotiable,” Amyx said of the time frame.

Not much else changed, though, as city commissioners gathered Monday afternoon for a study session devoted to the sales tax issue.

A majority of commissioners still said the bulk of any new sales tax should be devoted to repairing streets and sidewalks. A smaller portion should go to an economic development fund that would give the city the ability to build new infrastructure that would be needed to land a new company or job producer. A portion also would be devoted to the community’s ECO2 initiative, which is designed to promote new business park development and the preservation of open space.

And then, there’s the library.

Hack said by extending the sales tax to 10 years, it may give the city some funding to devote to a new downtown library. Chestnut said he also was interested in trying to find funding for a library as part of a half-cent sales tax, but both commissioners stopped short of saying the sales tax could fund the entire library project, which has an estimated pricetag of $30 million.

A sales tax is expected to generate $5 million to $6 million per year. Amyx wants to use about $5 million of the annual amount on maintaining city streets and sidewalks. He also proposes using $2 million of existing funds to bring the street maintenance budget up to $7 million per year.

Amyx’s plan also would free up about $3 million in property tax revenue that currently is spent on street maintenance that could be redirected to other parts of the budget. Commissioners asked City Manager David Corliss to prepare a report detailing feasible ways to spend that money. Hack said some of that could be directed to a new library project as well.

Commissioner Boog Highberger may be a fourth vote for a sales tax. Highberger said he thought a sales tax was the only realistic way to raise the type of money needed to fund the major amount of street work needed in the community. But on Monday, he conditioned his support for a new sales tax on finding another less regressive revenue source to go along with it.

Highberger suggested impact fees, which are fees that developers pay as new building permits are pulled for projects. Supporters of impact fees have said they help spread the costs of growth to the people who are responsible for the growth.

City commissioners stopped short of endorsing the idea Monday. All of Highberger’s fellow commissioners asked staff members to produce a report on how much it costs to build a house in Lawrence compared with other communities. Commissioners expressed concern that new fees could make Lawrence less competitive with other communities.

Commissioners didn’t set a timeline on when to make a decision on a new sales tax. Any new sales tax ultimately must be approved by voters as part of a citywide election.