City commissioners tonight may take their biggest step yet in placing a pair of sales tax issues in front of voters in November to save the city’s bus system and improve city infrastructure.

But the problem – according to a Lawrence group – is that the city is poised to ask the wrong questions.

Members of Grassroots Action plan to argue tonight that the city’s proposed two-tenths of a percent sales tax for public transit is inadequate and won’t do much to secure the long-term future of the city’s bus system.

“It would be sad and ironic if the sales tax proposal, after all this debate and discussion, isn’t sufficient to keep the T going at an adequate level,” said David Smith, president of Grassroots Action. “But we think that would be the case.”

Instead of the two-tenths of a percent sales tax proposal, Grassroots Action leaders are proposing that the transit tax be raised to a quarter of a percent. That would require reducing the second sales tax question – one to improve streets, fire trucks and other infrastructure – from 0.30 percent to 0.25 percent.

Thus far, that idea is not gaining traction with the key architects of the sales tax proposal. Both Mayor Mike Dever and Commissioner Rob Chestnut said they believed that the two-tenths of a percent sales tax was adequate for transit and that it would be a mistake to reduce the sales tax dedicated to streets and infrastructure.

“I know there are a lot of projects that can use that three-tenths of a percent,” Dever said of the tax, which has been proposed to rebuild several major streets in the city, buy fire trucks, improve sidewalks and address North Lawrence storm drainage.

Commissioners will discuss the sales tax initiatives at their 6:35 p.m. meeting today at City Hall. Commissioners will be presented with specific ballot language that they could approve to place on the Nov. 4 ballot.

City analysis

Smith said the city’s proposal is setting up another future crisis for the city’s bus system. He points to an analysis that city staff members did in June that shows a two-tenths of a percent sales tax would fall short of providing enough annual revenue to operate the transit system in future years.

According to the analysis, a 0.20 percent sales tax would allow the transit system to operate with an annual average surplus of about $210,000 per year from 2010 to 2013. But then as costs increase, the bus system would operate with an annual deficit of about $360,000 per year from 2014 to 2018.

The analysis – prepared by the city’s public transit administrator – concluded that it would be “highly likely” that the transit system would need additional new funding in the next decade over and beyond the 0.20 percent sales tax. The analysis showed a 0.25 percent sales tax would produce enough money for the transit system.

City leaders, though, are questioning the analysis. City Manager David Corliss said he did not think the large deficits projected in the analysis were likely. He said the analysis was conservative in many areas, including a 2 percent annual growth rate for the sales tax revenues.

Chestnut agreed, saying he did not think the analysis took into account potentially significant economies of scale that could be obtained by merging the city’s system with the Kansas University bus systems. The city already has signed a letter of intent with KU stating that merger is likely, if voters approve the sales tax.

“I dispute some of the assumptions,” Chestnut said.

Other factors

But the analysis also left out some factors that could increase the amount of money needed to fund the transit system. For example, the analysis does not include any money for replacing the city’s aging buses. It also predicts fuel prices to rise by 10 percent per year, which is much lower than the actual increase of the past year.

In addition to deciding on the amount of the sales tax, commissioners also will debate whether to combine the two sales tax questions into one ballot issue. Currently Dever, Chestnut and Commissioner Sue Hack have expressed support for making the transit and infrastructure sales taxes two separate questions on the ballot. Commissioners Mike Amyx and Boog Highberger have argued the sales taxes will have a better chance of passing if the questions are combined.