Archive for Tuesday, November 6, 2007

Making sales-tax cents

City Commission to choose proposal to put to voters

November 6, 2007


City leaders to debate new sales tax

City commissioners will discuss the possibility of a new sales tax at their meeting tomorrow night. They're considering at least four options. Enlarge video

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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.


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.


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.


gccs14r 10 years, 5 months ago

How about no more giveaways to developers who don't need the money? And what's this about rebuilding Wakarusa?!? If they're going to tax the poor for road maintenance, every dime of it should be spent on residential streets east of Iowa and north of 23rd, and most of it should be spent east of Massachusetts and north of 19th.

pinecreek 10 years, 5 months ago

Absolutely no way will this be allowed to go unchallenged. Who wants to help with the advertising PAC to kill this once its on the ballot?

City Commissioners, Corliss, & Co: Live within your budget and stop putting your hands into ours!

usesomesense 10 years, 5 months ago

Instead of trying to tax our own harder we should be pressuring the state to pressure the federal government to get the sales taxes we should already be getting from online and out of state purchases. We already gave up sales tax revenues from businesses in our city that provide goods and services to smaller surrounding cities with the promise that we would end up getting it back from the Fed. We need to make the state accountable.

As far as impact taxes go - it always should have been that way. There should be special property taxes on new developments for the first five to ten years they are there to help pay for infrastructure.

cowboy 10 years, 5 months ago

This city admin and this commission , who failed to implement any savings or cuts during the last budget session , and continue to spend like drunken sailors , need to cease refinancing their waste at the expense of lawrence taxpayers.

Kill the T , moratorium on travel , cut the staff salaries , cut the consulting costs , make the city entities ,like Eagle Bend revenue generators , quit raising sewer and water rates at 5% clips , quit printing al the propaganda that comes in the water bill each month , stop the mailings from the police chief warning ku neighborhods about parking in their yards , how much did that cost , quit subsidizing a select business sector , i.e. downtown , stop runing the street sweeper on clean streets , stop hauling yard waste , get rid of the sign nazi , stop funding the homeless enablers , quit buying crappy art . Why did the city have to buy over 500 acres of farmland for the sewer plant ? Probably 3 times what they needed.

This city is so completely mismanaged that they need a good kick in the a$$ , NO NEW TAXES !

monkeyhawk 10 years, 5 months ago

How about the city opening its books to the taxpayers? Let us take a look at where our money is going and where it has gone. Then we can make an informed decision when it comes time to vote on these matters.

How many items are going to packed into the sales tax? It seems to change daily. Most of us kinda already thought we were paying for the streets. If there is any giveaway to private interests included in this tax deal, I would vote no. It doesn't seem the right climate to be asking for more money when the city's secret dealings are being investigated.

Besides, isn't this why all those people went to Washington recently? Or, did they go? I can't seem to find any info on that. Who did they talk to? What was accomplished? How much did the citizens finance? For that matter, how much was the last trip when they met with "staff"? LJW promised to disclose that last year.

KsTwister 10 years, 5 months ago

Past experience tells me that any new revenue they received will go right into any pipedreams conjured up. Which puts Lawrence right back to the same position they are in now. No way, not even a little increase is going to be accepted with exception to a limited few that it would not impact. As much as the citizens who have already been overtaxed in the past years the exodus has already started as realization that City Hall continues a ridiculous trend in returning to the people to which have said enough is more than enough. We were told these things would be repaired with our past high tax increases. Only fools would believe this one again. When they can waste money having inspections for homes who get licensed plumbers and electricians who replace existing water heaters and furnaces goes to show you how the city managers are beyond even trying to save the town money in gas and wages. One part of the article says $3 million, Chestnut says $2.5 million---well get it right, what is it really? Next election please!

monkeyhawk 10 years, 5 months ago

"How about tax relief for once."

Interestingly, I got the tax bill bill for my Bonner Springs property. My taxes went DOWN. Gee, how can that be? Maybe Carol Marinovich can offer some guidance.

guesswho 10 years, 5 months ago

I'm not an expert on this, but I had understood that a lot of state and local governments would be hurting because of Bush's tax cuts. So, I don't know if any of us have benefitted from the federal tax cuts, but we are having to pay for it through reduced transfers from the federal-state-local level.

I do support a new library and new sports centers for youth, a better feasiblity study needs to happen then a new tax increase without some other relief.

gccs14r 10 years, 5 months ago

"The street are in the mess they are because of the last commission. The 3 amigos."

Actually, they improved the specification for road construction so that they'd last longer. Whoever said limestone aggregate was acceptable must've been getting paving company kickbacks.

Gareth Skarka 10 years, 5 months ago

As usual, the people who will eventually bitch the loudest about the crumbling infrastructure are the ones who have been conned into the "Taxes are Of DE DEBBIL!!!" no-brainer position.

This is what taxes are FOR, dumbasses.

pace 10 years, 5 months ago

No sales tax increase until we get a cost analysis of current practices, such as the tax abatement program. Sanitation is famous for dodging the bid system by buying multiple items singularly at their favorite shops. Excessive overtime is budgeted in all departments, especially Public works due to ancient scheduling habits. We have guys who regularly get overtime for working Saturdays, while they could just change the schedule so one person works Tuesday through Saturday. We need a review of practices and their costs Those boys don't want to change their ways. Not one commission is responsible, they are led by the City staff, time for the commission to lead the City staff into new habits. The streets have been neglected for more than two decades in favor of helping developers and giving out corporate welfare. We home owners paid for the street repair and end up seeing the money buy streets for a new subdivision. When my home was built the city put a "special" assessment on my taxes to pay for the road. That is considered discouraging for new developers, i consider it only fair they pay their share.. No new taxes unless they are married to impact fees.

Hoots 10 years, 5 months ago

For one I'm sick of people here blaming everything on developers. When I bought my new house I PAID for the streets, sewer, electrical, and every other thing that made that lot the tune of about $12,000. It has been this way for years in this town. I also paid a special for the road that runs close to my area...NOT YOU. Funny thing is when Old West Lawrence was built the city at large paid for those improvements. It is also funny that my tax dollars fund new sewers, water lines, schools, street repaving for your neighborhood. My family has been here for almost 140 years yet the people who have been here a year or two want to complain about growth when they are in fact part of the problem. If you have a child you are growth as well. No one ever sees themselves as part of the problem. We are all part of the problem...we all live here. Get a life and stop living 50 years in the past.

Hoots 10 years, 5 months ago

Now for my real point. The tax dollars will probably never meet expectations. For one...dollars on many items may well be shopped out of town, especially big ticket items. Would it be worth $500 to drive half an hour? This tax money will just be swallowed up in the same way government always does. Like a fat kid can never has enough Twinkies and Mountain Dew.

Lifelong_Lawrencian 10 years, 5 months ago

Max1: "I also agree with Highberger - we need "new impact fees" "to recoup the cost of new city infrastructure"."

Mr. Highberger, et al, has already raised impact fees to the point where Lawrence builders pay triple the amount that Wichita builders pay and double the amount Olathe charges.

Pace: "When my home was built the city put a "special" assessment on my taxes to pay for the road. That is considered discouraging for new developers, i consider it only fair they pay their share.. No new taxes unless they are married to impact fees."

In 2005 the city collected $1,094,660 in impact fees. Since then the impact fees in Lawrence have been increased by 20%. Note that this money is for improvements to major infrastructure necessitated by growth, i.e., the new sewage treatment facility. ALL the infrastructure within a development is paid for by the developer, often along with assessments for other nearby or future projects.

This brings up the age old question of who should have to pay for major new infrastructure associated with growth. A good analogy is that of a utility company, say Sunflower Cablevision. They want to provide service to a newly developed neighborhood. This means they must install more cable to each lot and purchase and install new equipment, repeaters, etc. This stuff is expensive but easy, but when they reach a certain number of users they must purchase more server space, perhaps enlarge their main trunk capacity with more fiber, etc. Should they fund this by charging only the new customers an impact fee? Of course not, this would be bad for future business.

The city must install a new sewage treatment facility and the new sewage system associated with it to serve current and future growth south of the Wakarusa and lessen the load on the current facilities. This is a huge expenditure that will not yield much income for many years. There will necessarily be a period where we have too much sewage treatment capacity.

The same goes for major new roadways like the 15th street extension. Does it make sense to only charge new homebuyers the cost of this roadway? When sixth street was enlarged, the state paid most of the bill. Shouldn't Lawrence have paid for it all even though it is a state hiway? How is this fair to the people who live in Goodland?

KsTwister 10 years, 5 months ago

Much of lion's share of the mismanagement blame can be placed on past commissions; however, business as usual with raising of taxes is not the answer. Remember Hack has been serving since 2002 and Boog since 2003 just to refresh some facts. Even water rates have been raised over and over to "pay" for the same projects. Enough.

grimpeur 10 years, 5 months ago

So, Lifelong, exactly what is the current impact fee scheme for Lawrence, Wichita and Olathe, especially compared to Eudora, JoCo, or DeSoto, in $/sq. foot or $/acre?

As for Wakarusa, "Chestnut...said city leaders believe major portions of Wakarusa Drive need to be entirely rebuilt." Well, get in line, bud, right behind all of E. 13th, Louisiana from 17th to 19th, 17th from Louisiana to Barker, and 19th from Mass to Iowa. And get KU to chip in it's fair share, since it's been encouraging people to drive into the center of town.

Kinda sucks that I'll have to pay more for a shirt, a bike tire, or a pound of coffee in order to support the habits of recreational drivers who are unnecessarily tearing up the streets in this town.

gccs14r 10 years, 5 months ago

"They want to provide service to a newly developed neighborhood. This means they must install more cable to each lot and purchase and install new equipment, repeaters, etc. This stuff is expensive but easy, but when they reach a certain number of users they must purchase more server space, perhaps enlarge their main trunk capacity with more fiber, etc. Should they fund this by charging only the new customers an impact fee?"

That's how it used to be funded. If you built in a new area, you had to pay for all those services to be run to you. Water, gas, sewer, electric, phone, and later cable all had to be paid by the homeowners. Specials would be assessed for 10-20 years to pay for infrastructure. Back in the 70s, it cost $100 to have cable TV installed, which was two weeks' pay for a lot of folks. Nowadays, the folks building McMansions expect someone else to pay for their sprawl.

justthefacts 10 years, 5 months ago

Without resort to name calling, I agree with anyone who has said we already pay enough in taxes. The taxpayers are not money trees; always capable of growing more green. If the city leaders we have now cannot find OTHER things to cut in terms of city provided services, in order to fund necessary things like street repairs (not necessarily street additions or pretty flowers/trees near roads) or fire & police salaries and equipment, I suggest we (a) get rid of the current crop of "leaders" and (b) "hire" (elect) people who are better at living within a budget!!

The way things are going, we are going to end up a socialist country; where half of all salaries are used to pay for government programs. The results of that system can be seen first hand in the UK - I suggest to those who approve of such systems move there for a year or two (minimum) before scrapping the capitalist system entirely.

All negativity and theory aside, what are the facts? Can anyone accurately report them: What do other communities (in Kansas and elsewhere) charge as sales tax? And what is the median income of people living in those cities?

Lifelong_Lawrencian 10 years, 5 months ago


Lawrence charges its impact fee with the water tap, as does Wichita. The fees are based on tap size. Lawrence 1" tap "system development charge" is $4,680. Wichita 1" meter "water plant equity fee" is $1,520 and now charges a new "sewer plant equity fee" of $1,350.

In 2005, Lawrence collected $1M, while the city of Olathe collected $3M. But Olathe had 6 times the amount of growth. I have no figures for Eudora or Desoto. Note that many communities in Kansas charge no impact fees and offer incentives instead.

Lifelong_Lawrencian 10 years, 5 months ago

gccs14r: "That's how it used to be funded. If you built in a new area, you had to pay for all those services to be run to you. Water, gas, sewer, electric, phone, and later cable all had to be paid by the homeowners. Specials would be assessed for 10-20 years to pay for infrastructure. Back in the 70s, it cost $100 to have cable TV installed, which was two weeks' pay for a lot of folks. Nowadays, the folks building McMansions expect someone else to pay for their sprawl."

Actually, just the opposite is true. The trend is that new homebuyers pay for more and more every year. Utilities like TV, phone, gas, electric, take care of themselves. The developer (new homebuyer) takes care of everything else. In the 70's the city used to pay for the extra cost of street width over the standard 27", for the extra sidewalk on thru streets (and extra width). They used to pay for the extra cost for major water mains and sewer mains. They had never heard of impact fees. Now the city pays for NOTHING. They also saddle new homebuyers with special assessments to pay for major arterials like Wakarusa Drive and George Williams Way, which they used to pay most of.

Every time a new "MacMansion" goes up, you should be happy. This homebuyer is paying a huge burden in property tax even though they may have no kids attending school, and probably have a 2" water meter with an impact fee of $11,420.

One could actually make a good case for these people to receive a tax abatement, since they use few public resources (sewer, parks, police, fire, schools, etc.) per capita and pay an inordinately large share of the cost. A $1M home would pay nearly $14,000 per year in property taxes.

Richard Heckler 10 years, 5 months ago

Lawrence real estate/development/chamber of commerce special interest group spent 25 years expanding the tax base authorized by their bought and paid for city and planning commissioners.

Where's the money?

Kontum1972 10 years, 5 months ago

once on child finishes high school i am putting my house on the market sell it and i am out of here i have a good friend who moved to an island not far from australia a few years ago and he sent me an email the other day he thought about coming back but he sees the LJW online and he said.. forget it! I agreed with him...we need a coup' in the city hall

LoL, this use to be a really kool town to live i regret ever moving here.

ps.. COWBOY i agree with you on all of that extra flyer stuff in our water bills...that fancy coated stock is not cheap with all the folds in it..anyone with a background in the printing biz knows this stuff is not cheap to produce....but oboy we have it here in lawrence, I AM NOT IMPRESSED!!!!!!!

Lifelong_Lawrencian 10 years, 5 months ago

With that logic Logarithmic, the developers should be fat and happy right now with their voice ruling the city instead of complaining about the slow real estate market. Believe it or not, Lawrence has steadily averaged about 300 new homes per year over the last 20 years with few ups and downs until recently.

I would challenge anyone to name one type of business that has been more adversely affected in recent years by legislation (codes and restrictions) and by heaping costs on them traditionally paid for from other sources. I am not saying that there aren't any, but it would be interesting to hear them. Perhaps coal plant construction for one.

I am also not saying that this trend is not totally justified. It would, however, be nice to not have to hear people blame all the city's problems on development. Why do you think we need a tax increase anyway? Could it be that the city incorporated income from growth statistics that simply did not materialize? Once the city gets used to spending money at a certain rate, it is hard to cut back. Face facts Logarithmic, the reason our city is hurting now is because we are no longer growing.

Godot 10 years, 5 months ago

The 10 year half cent tax is clearly what the Mayor wants. I will vote no for any tax increase, particularly one that has a $500,000 to $1,000,000 per year cushion for "economic development." How many high paying croney jobs will that fund, anyway?

pomegranate 10 years, 5 months ago

Has anyone driven down Mass Street lately? Now that they are through "fixing" the old pipes, etc, the street is worse than ever. Why in the heck did they not repave the doggone street when they had it all ripped up?

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