Archive for Sunday, June 20, 2010

Mayor backs plan for sales tax signs

June 20, 2010


Lawrence Mayor Mike Amyx is supporting an idea to require businesses that charge a special sales tax to place a sign on their front doors to notify consumers.

Amyx said Friday he’s heard from a lot of consumers who are concerned about new retail districts that charge a special sales tax rate to pay for everything from sidewalks to security.

“I think people just want to know up front if they are paying a sales tax that is different than what is considered the norm,” Amyx said.

Amyx said he also supports a proposal that would require special taxing districts to win a super majority from the City Commission, meaning proposals would require four of the five votes on the commission.

City commissioners will consider the proposals Tuesday.

Some members of the business community are expected to oppose the measures, which are stricter than other cities in the state.

Matthew Gough, an attorney with Lawrence-based Barber Emerson, said the new regulations could discourage retailers from doing business in Lawrence.

“As far as a dollars and cents impact, the people I’ve talked to just don’t know what effect it will have, but they all feel it is not in their best interest to put a scarlet letter on their business,” Gough said.

Gough also said the special taxing districts are particularly useful for infill developments and other tough-to-finance projects. He said if the city complicates the process of creating special taxing districts, retailers may add to urban sprawl by building on the edge of the community where development can be simpler.

City staff members are recommending, if commissioners want to move forward, that signs be at least 8 inches by 8 inches, that the font be at least 36 points in size, and that the sign be placed at the primary entrance of a store. The sign would be required to state the percentage rate of the special sales tax being charged.

The issue has come up as more retailers have asked to create Community Improvement Districts in Lawrence. The Community Improvement Districts allow property owners to create a district where up to an extra 2 percent sales tax can be charged on sales made within the district. The extra tax revenue can be used by property owners to pay for both public and private improvements, ranging from storm sewers to actual store buildings.

A development group that owns property near 23rd and Ousdahl has requested a CID to revamp several older buildings near the intersection. Lowe’s also has expressed interest in a CID for a proposed store near Sixth Street and Folks Road.

Lawrence currently doesn’t have any CIDs, but does have two similar types of districts. The Oread, the hotel at 12th and Indiana, charges an extra 1 percent tax that helps pay for public infrastructure and a parking garage that serves the hotel. Businesses on the northeast corner of Sixth and Wakarusa also charge a 1 percent special tax to pay for multiple public improvements in the area.

The city recently has created a sales tax page on its website — — that will list all special taxing districts in the city.

Commissioners meet at 6:35 p.m. Tuesday at City Hall.


jayhawklawrence 7 years, 6 months ago

I am curious how these "taxes" will be monitored, collected and distributed.

Or is that up to the "good intentions" of the business owners?

Chris Ogle 7 years, 6 months ago

Matthew Gough, an attorney with Lawrence-based Barber Emerson, said the new regulations could discourage retailers from doing business in Lawrence.

Well whatever you do.... don't tell us. (mushroom theory) Keep in the dark and feed BS.

Chris Ogle 7 years, 6 months ago

Matthew Gough, an attorney with Lawrence-based Barber Emerson, said the new regulations could discourage retailers from doing business in Lawrence.

Well whatever you do.... don't tell us. (mushroom theory) Keep in the dark and feed BS.

John Hamm 7 years, 6 months ago

Okay look at this reasonably. Citizens want the signs - they want to know they're paying extra for something and the business or developer is getting the extra $. The businesses, no surprise here, don't want to tell their customers they are charging an extra 1%. But the real interesting thing is that the Mayor is actually listening to the citizens of Lawrence. It will be very interesting to see if the rest of the commission takes heed. My money is on no......... We should all thank Mayor Amyx for his stand.

BigAl 7 years, 6 months ago

Good. Doug Compton provides a LOT of jobs for people in Lawrence. From his own employees to the employees of his sub-contractors and their suppliers. I am glad that the city is working with people that want to see Lawrence grow.

nut_case 7 years, 6 months ago

Well, I don't know if they are 'really' listening... I don't want the extra taxes at all. But if they feel they HAVE to extract more money from the customer, at least they could put a big 4'x8' sign up which says how much extra they intend to charge. It should be clearly visible from the road, so I know whether I want to stop or drive right on by.

Keith 7 years, 6 months ago

Unless the state left wiggle room for cities to make the law more restrictive, I predict a lawsuit the moment the commission makes the businesses disclose their robbery.

jafs 7 years, 6 months ago

The state law says that cities MAY allow businesses to charge UP TO 2% extra tax.

There is no requirement that cities allow this at all, and, as far as I know, nothing to prohibit them from setting their own rules when it's used.

Write2Know 7 years, 6 months ago

Just like the business that uses a rewards card, for example Dillons, when you checkout they say something like "You just saved $2.30 today". These businesses should say "You just paid an extra $1.98 in taxes".

Richard Heckler 7 years, 6 months ago

With all due respect Lawrence-based Barber Emerson represent the Schwada brothers at city hall consistently aka sprawl developers.

Whatever could retailers be afraid of?

Sprawl development also increase YOUR taxes in a big back door way.

Why do developers want to increase OUR taxes in every way possible?

It's all about a "Free Lunch" from taxpayers.

Richard Heckler 7 years, 6 months ago

Do these taxes go into the corporate store bank account? How does the city get their hands on the money? Or does the city ever get their hands on the special sales tax dollars?

Then Lawrence Taxpaying Voters should weed out the city hall “Free Lunch” program:

Here’s what happens. And this is a good example of where the news media hasn’t done a good job. I have tons of news clips that say, oh, this new shopping mall is coming or a new Wal-Mart or a new Cabela’s store, and thanks to tax increment financing, this store is going to be built. Well, what is tax increment financing?

I’ll tell you what it is. You go to the store with your goods, you pay for it at Wal-Mart, and there’s a very good chance that that store has made a deal with the government that the sales taxes you are required to pay, that government requires you to pay, never go to the government. Instead, those sales taxes are kept by Wal-Mart and used to pay the cost of the store. And typically in those deals, the store is tax exempt, just like a church.

Now, there are two ways that it’s important to think about this. One is, that means your kid’s schools, your police department, your library, your parks are not getting that money. And you’ll notice we keep saying we’re starved for money. We’re twice as wealthy as we were in 1980, but we’ve got to close hospitals, and we’ve got to close schools, and we don’t have money for all sorts of things like after-school programs, even though we’re twice as wealthy.

The second thing to think about is, imagine that you own Amy Goodman’s or Juan’s department store across the street. You suddenly have to compete with people whom the government is giving a huge leg up on. You think you would go broke after a while? Well, in fact, you will.

And I tell about a man named Jim Weaknecht who owned a little store in the Poconos of Pennsylvania. He sold fishing tackle, hunting gear, stuff like that. And the way he made his living in his little tiny store, enough that he was able to have his wife stay at home and raise their three kids full time, was by charging less than a company called Cabela’s.

Well, then Cabela’s came to town. This little city of 4,000 people made a deal to give Cabela’s $36 million to build a store. That’s more than the city budget for that town for ten years. It’s $8,000 for every man, woman, and child in that town to have this store. And even though he charged lower prices, he was pretty quickly run out of business.

That’s not market capitalism, which is what Ronald Reagan said he was going to bring us. He said, you know, government’s the problem, we need markets as a solution. Well, that’s not the market. That’s corporate socialism. And what we’ve gotten is corporate socialism for the politically connected rich—not all the rich, the politically connected rich—and market capitalism for everybody else.

Richard Heckler 7 years, 6 months ago

Johnston then boggled the crowd with a blunt assertion: "We pay billions of dollars in taxes that never get to the government." Much of the sales tax we pay at big box stores and shopping centers is diverted to the large companies that own the stores. It's just one of the many swindles these chains have learned to perpetrate against city and county governments.

This is so effective that the Cabela family, which owns a chain of big-box sporting goods stores, receives 137% of its profits from taxpayer subsidies. If they couldn't work this scam, they wouldn't be in business at all.

The heart of the wealth transfer is tax increment financing (TIF). Store owners come to town leaders and offer to build a new store that, they promise, will "create jobs." In exchange, the city gives them the land, builds the store to their specifications, and finances it all with tax-free municipal bonds (which are usually held by associates of the store owners). To cap it all, the store keeps the sales tax generated in the store to pay off the bond holders. If the store is built on government land, it's also exempt from paying any property taxes.

Why do city governments take such a blatantly bad deal? Many of them are struggling, and believe that a new Wal-Mart will bring in shoppers from all over—shoppers who will stick around and shop in their town. It never works out that way. Under stiff competition the small shops go out of business, taking the town's tax base with them. Schools, parks, recreation programs, and libraries are starved.

Almost always, these city councils would be far better served putting the money in upgrades to local Main Street businesses, rather than financing the competitor that will kill them.

Johnston also noted that as a result, the nation is losing mom-and-pop businesses that are often more efficient in real terms than the big box stores, which carry tremendous overhead in management and distribution. He suggested that audience members do an experiment: first, eat at a chain restaurant like TGIF—and then go the next night to a local family-owned place. Not only will you spend half as much in the family place—the people working there are probably making more money. That's what real efficiency looks like."

Other scams Johnston noted:

Richard Heckler 7 years, 6 months ago

"the Schwada brothers" NOT the Schwada family......

cummingshawk 7 years, 6 months ago

Considering how little discussion there was before approval of the misnamed Community Improvement District by the city council, can the measure be repealed and put up for a public vote like the library expansion?

smercer 7 years, 6 months ago

Can the vote be a choice between building the library or a new rec. center? When the bonds for the aquatic center retire in 2012, the city plans on building additional recreation space. That taxing authority could be used to build the library, instead. Let's just have one vote: Library or Rec. Center or neither.

workinghard 7 years, 6 months ago

Can we vote whether to allow special sales taxes or tax increment financing at the same time we vote on the library?

dubstep 7 years, 6 months ago

Thanks Amyx for listening to the community and taking their side over the development community. Hopefully this will be an example of a compromise between community and business expectations. The city created this tax solely to help the business community, but they want to do it on their terms, rather than giving them an extra tax with no strings attached. You want the benefits? There SHOULD be strings attached! We SHOULD be informed consumers. If free market (or more correctly, neoliberal) ideologues propose we should vote with our dollars (under the assumption that we are fully informed consumers and know what we are voting for ), why do they attempt to obfuscate what we are paying/voting for? An informed public is critically important if we are to be citizen consumers who "vote" with our dollars.

Despite some comments I've seen in some articles that paint Amyx as in the pocket of the development community, it is simply not true. As a businessman he is sympathetic to some of their issues, but he has shown SO many times that he listens to the community and when legitimate concerns are widespread, he does not hesitate to take a position that reflects the community and our culture. Amyx has great integrity and is motivated by a desire to serve the PUBLIC interest. Often this means supporting businesses' desires to do business, but that doesn't make him a Chambercrat. Thanks Mike for your quarter-century of public service to our community. It is the nature of the job to have critics, but I find many of these critics paint you unfairly without knowing anything about what is going on at city hall.

tomatogrower 7 years, 6 months ago

"Matthew Gough, an attorney with Lawrence-based Barber Emerson, said the new regulations could discourage retailers from doing business in Lawrence."

So basically what he is saying is "honesty is not the best policy". Well I guess he is an attorney. People should know the real price they are paying. Businesses pass on their costs to consumers by raising their prices. This extra "tax" is a way for them to advertise one price, but actually charge a higher price. It's not honest. The practice should end, but if it doesn't then consumers should decide for themselves if they want to do business with these places.

tomatogrower 7 years, 6 months ago

"Some members of the business community are expected to oppose the measures, which are stricter than other cities in the state." This is because there are a lot of people in other communities who don't pay much attention to their local governments. You might say it's a pain, but in Lawrence we pay a attention and we care. If the other towns want to get screwed, let them.

dubstep 7 years, 6 months ago

In getting to know the city commissioners, I firmly believe they all want to benefit the community as a whole. They work hard and believe they are doing the right thing. The source of community contempt comes from when people disagree as to how to serve the public interest. The "chambercrats" have very pro-business stances, and this comes from a belief that "the business of government is business" i.e., we should do what we can to maximize economic activity because that is the most effective way of benefitting the public as a whole. You or I may think this is a simpleminded or just plain wrong view of the role of government, but that does not make those we disagree with evil or conspiratorial, or anti-Lawrence. Obviously the business community wants whatever advantages it can get to make it easier to turn a profit, and the city takes measures to give those advantages, but Lawrence voted these people into office (If you complain they raised money from the Dev. community, well, turnout was so low that we have nobody to blame but ourselves if you don't like who is in office).

Bottom line, these taxes are symptomatic of a larger and wider view of the role of government driven by neo-liberal and free market capitalist ideology that contends economic growth is the (only) measure of success for a society. We see this almost every city in this country, in virtually every state government, and the federal government. Government has been systematically privileging the private sector over citizens since Reagan, and these taxes are exactly that.... increasing the burden on citizens so that businesses can prosper (and in turn, benefit everyone).

tomatogrower 7 years, 6 months ago

"The "chambercrats" have very pro-business stances, and this comes from a belief that "the business of government is business" i.e., we should do what we can to maximize economic activity because that is the most effective way of benefitting the public as a whole."

We see benefits going towards more retail and more housing, which hasn't lowered the cost of housing at all. How about trying to bring in some businesses that create real jobs. Not low paying retail jobs, and not temporary construction jobs. If these developers can make a case of how this "tax" benefits the community, then make the case. But don't hide the fact that the advertised and posted price is the real price. Why are you afraid to be honest and open, if it benefits the community?

Richard Heckler 7 years, 6 months ago

Remember city fathers are not bound by any law to approve any building requests. The pressure comes from special interests.

By Kim McClure

July 24, 2009

To the editor:

The July 14 editorial asks, “What’s downtown going to look like five, 10 or 15 years from now?” The answer can be known, and the picture is not pretty.

Lawrence has enough spending to support about 4.1 million square feet of retail space, but the City Commission permitted developers to expand the supply to over 5.5 million square feet.

Lawrence has too much retail space chasing too few vendors, which means that many stores go empty, especially in the older shopping centers like downtown.

The surplus development has stalled redevelopment plans downtown and has pushed the vacancy rates so high that disinvestment and blight now threaten. Investment, both public and private, is wasted. The taxpayers’ $8 million parking garage stands largely empty. The Hobbs-Taylor building and the 600 block of Massachusetts should be the top performing spaces in the community, but they have significant vacancies.

The recession has contributed to the problem, but had we properly managed our growth we would be much better off.

The developers’ short-term gain is now our long-term loss. Managed growth would have prevented much of the problem and would have protected and enhanced our downtown.

It will take many, many years to absorb this surplus space and, until this happens, it will be hard for downtown to compete. We can only look forward to many years of high vacancy and disinvestment. We need a City Commission that knows how to pace the growth of supply so as to protect our unique downtown.

McClure is from Lawrence

Any further approval of retail,office or light industrial would seem like reckless decision making and reckless use of tax dollars.

Any financial institution that participates in the financing of over building would seem like reckless and questionable spending as this type of reckless behavior is what the economics of america down. Boom town economics is fiscally irresponsible.

Ralph Reed 7 years, 6 months ago

Typical response. Discredit and demean the person rather than attempting to argue the position. Well done Pil2. Now, please comment on the substance.

Just because an LTE is a year old doesn't make it any less valid.

Kontum1972 7 years, 6 months ago

mb the new sales taxes should pay for the trampoline on the bottom level of the Oread since it seems to be the new hot spot for non-bungee escapades.

igby 7 years, 6 months ago

That's cold. I heard that the guy fell and landed on his feet just a few feet from the wall. However, he compressed. Need I say more. It was a terrible death. Must of been up by the flag poles and went over the railing and landed on the front lobby first floor entryway roof. That's why no one found him until the next morning. Poor guy, seven level drop and a terrible way to die.

Thomas Kurata 7 years, 6 months ago

Journal-World Reporter, Chad Lawhorn, should be commended for his continuing excellent reportage since February 5, 2010 concerning transportation development districts at Bauer Farm and the Oread Hotel in Lawrence. Mayor Mike Amyx has clearly demonstrated that he is on the side of shoppers and consumers by supporting transparency on the additional sales taxes that are cropping up around Lawrence. Thanks and keep up the good work, Mike!

Orwell 7 years, 6 months ago

Sorry, but this extra signage is a half-remedy for a city-caused problem. It's just wrong for a government to delegate its taxing power to a private business to meet ordinary business expenses. It's just a shell game allowing selected businesses to pretend their prices are lower than they really are.

Keith 7 years, 6 months ago

State problem, not city, this new CID is the result of a state law.

jafs 7 years, 6 months ago

The legislation does not mandate that cities allow it.

It states that cities MAY allow businesses to charge UP TO 2%.

Cities can and should, in my opinion, simply refuse to allow these extra taxes at all.

Keith 7 years, 6 months ago

Just to summarize, our state legislature, composed of a Republican majority that hates all taxes, loves those taxes when they are hidden from the taxpayer.

igby 7 years, 6 months ago

If by accident, I happen to buy something at one of these places; I will quickly return it for a refund.

If it's a beer or food, I'll just piss on your sidewalk as we are leaving.

Randall Barnes 7 years, 6 months ago

pizza hut. $10 pizza ? well with the extra fee they add on makes the pizza $14.98 almost 50% more.

Ralph Reed 7 years, 6 months ago

Absolutely nothing wrong with what Mike is proposing.

I agree that a special taxing district should require a super majority. This will require businesses to show the benefit to the community that the special taxing district warrants. As I understand it, this doesn't mean additional tax money going to the city, it means that x% of the sales goes to reimburse the company for development costs. This also begs the question that since many of the big boxes are built by developers, how much of the "special tax" goes to the developers? Are the shoppers (citizens of Lawrence) supporting the developers' gambling?

I also agree that stores should prominently display a sign indicating they charge a special tax. That is not going to deter people from shopping who want to shop at those stores. Case in point is the Legends. Almost every store and restaurant there charges a special tax to pay for the development costs, yet you don't see that on their stores, it's simply rolled up into the "sales tax".

jackson5 7 years, 6 months ago

A TDD (6th and Wak or Oread District) must be used for development costs. However, the CID can be used for most anything and is specifically NOT limited to infrastucture costs. In a nutshell, the property owners can collect the extra tax and simply use it for operating expenses, thus directly increasing the owner's profit by the amount of the tax collected. The CID law does not require the property owner to use the extra tax to improve the property in anyway.

But the problem with CID is bigger than signage, enriching a few developers, and imposing a regressive tax on consumers. With CIDs, Lawrence will soon have sales tax over 10% and couple that with some of the highest property taxes in the state and this is a recipe for economic disaster. And that is before tax increases for 1) new school facilities, 2) new city rec. facility, 3) a library expansion.

dubstep 7 years, 6 months ago

What can we say about the fact that nobody spoke out against the CID at the city commission meeting? I saw the article on here informing us that the commission would be considering it. For everyone with comments up here, why didn't you go to the commission meeting and speak out against it BEFORE it became law?

For all of the "watchdogging" people proclaim to be doing in this town, there's little evidence of it outside these comment sections.

For me, I feel like we had sufficient extra taxes in the TIF and TDD policies. Why did we even create these policies if we are going to have a super-TIF/TDD in the CID? It seems to be the same type of thing without the strings. Should we be guessing Bauer Farms will be the only place with a TIF, Oread the only place with a TDD, and all new developments with special sales taxes having the CID?

Regarding the rebuttals about economic growth being the only measure of success... we can grow the economy in terms of GDP while enriching the rich at the expense of a shrinking middle class. That has been the trend for the past decades. As the GDP has grown, everyone has gotten a taste, but the rich have gotten richer by any comparative measure.

(Nobel Prize Winning Economist) Paul Krugman briefly discussed the problem with our economic indicators, and many have written about the need to produce a more robust measure that actually includes the well-being of the middle and lower classes.

just_another_bozo_on_this_bus 7 years, 6 months ago

I think lots of people spoke out against this tax, and that's why we're seeing this signage requirement proposed. But the majority of this commission are in office primarily to protect and promote business interests, and those interests badly want this new tax, so it'll likely be approved.

dubstep 7 years, 6 months ago

You are right that a lot of people have spoken out, but there was not a lot of protest when they created the tax.

"Commissioners last week gave approval to a policy that would allow the new taxing districts in Lawrence. But since then, commissioners have received multiple phone calls and e-mails citing concerns with the district. " - May 19

Janet Lowther 7 years, 6 months ago

I would rather require them to incorporate the special tax into their stated prices, rather than collecting it as an add on, as typical for sales tax.

hipper_than_hip 7 years, 6 months ago

The Lawrence Chamber of Commerce thinks that requiring businesses to display the true sales tax is anti-business, anti-development, and anti-growth.

Apparently transparency isn't one of the polices that the Chamber of Commerce supports.

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