Making sales-tax cents

City Commission to choose proposal to put to voters

A 10-year, 0.5 percent sales tax is the most feasible way for the city to tackle the issue of deteriorating streets, the city’s top executives are recommending to city commissioners.

“For lack of a better term, you get a bigger bang for your buck,” said Cynthia Boecker, the assistant city manager who has been researching sales tax issues. “This option gives you more money over a longer period of time to address the issues.”

City staff members have put together information on four possible sales tax scenarios. But they’ve said the half-percent sales tax with a 10-year sunset period – the most aggressive of the four options – provides the city the best chance of catching up on a backlog of street maintenance and major road rebuilding projects.

Now, city commissioners will get to decide which, if any, of the options will be put on a citywide ballot for the public to decide. The four options will be on the City Commission’s agenda for its meeting at 6:35 tonight at City Hall.

Options

The meeting might not produce an answer, though. Several commissioners said Monday that they still had several issues to resolve before they would be willing to endorse a specific sales tax proposal.

“I think we’re really going to have to have some discussion on whether to have a half-cent versus a quarter-cent,” City Commissioner Mike Amyx said. “We’re in a position where every penny counts.”

The staff has put together two scenarios that involve a half-percent sales tax and two scenarios that involve a quarter-percent sales tax. The quarter-percent sales tax is estimated to produce $3 million in revenue per year compared with $6 million for the half-percent. All four options envision spending about five-sixths of the sales tax money on road and street repair, with the remaining one-sixth split between economic development activities and open space acquisition.

Both options will allow the city to spend significantly more on street maintenance than what the current budget allows.

For example, the quarter-percent sales tax would allow the number of two-lane roads that can be resurfaced to grow from about 27 miles per year currently to about 40 miles per year.

But with a half-percent sales tax, the city would be able to not only increase its maintenance efforts but also begin funding $2.5 million per year in road reconstruction. City leaders have said the reconstruction money is important because they know there are several roads that have deteriorated to the point that simple maintenance isn’t adequate.

Questions linger

City Commissioner Rob Chestnut said he needs more information on how much the $2.5 million per year could buy the city in street projects. He said he wants to see a list of specific projects that the city could build during a five-year or 10-year period with the $2.5 million per year. For example, he said city leaders believe major portions of Wakarusa Drive need to be entirely rebuilt.

“We have to have a real plan on how we’ll spend this money, and we need to be able to present it to the public,” Chestnut said.

But both Amyx and Chestnut said they are open to a sales tax increase as long as the plan is structured well. That is in addition to Mayor Sue Hack, who has been a long-time supporter of a sales tax increase if it is structured properly.

“We need to do something to get beyond the curve and aggressively take care of the streets and bring them to a level that people will be happy with,” Amyx said.

He said he supports the sales tax over a property tax increase because it will allow visitors of the community to help pay for the repairs.

Reservations

City Commissioner Boog Highberger remains the one commissioner sounding the most caution about any new sales tax plan.

“I still want to have a good-faith effort to find some less regressive source of revenue before we launch forward on a sales tax issue,” said Highberger, who is concerned a sales tax will hit low income residents harder than any other.

Highberger previously had expressed an interest in an intangibles tax, which would impose a percentage tax on interest and dividend earnings. Highberger said he now recognizes that idea doesn’t appear politically feasible in Lawrence but said he wants to look for other alternatives. He specifically said the city ought to review establishing new impact fees, which are fees charged to development in an effort to recoup the cost of new city infrastructure needed for growth.

Public election

The list of options from staff members didn’t include a recommendation on when a public election should take place on the issue. Amyx has suggested the August primary would be a good time so that the city wouldn’t have to pay the cost for a special election. A special election has an estimated cost of $36,000.

Another option, staff members, said is a mail ballot. Costs for a mail ballot are estimated at about $100,000.