Thanks to lower property valuations, Lawrence and Douglas County will face some budget challenges this year, but the problems our local governments face pale in comparison to the situation in Junction City.
On Tuesday, the Junction City Commission approved putting a 1 percent local sales tax increase to the city’s voters on Aug. 3. That will be on top of the 1 percent increase just approved by the Kansas Legislature and probably will be a tough sell to Junction City voters. However, commissioners said the tax is necessary to pay off nearly $70 million in debt the city ran up when it built infrastructure to support new housing developments it believed would be needed to serve a large influx of soldiers at nearby Fort Riley.
Although Junction City’s population has grown, it hasn’t grown nearly has much as it expected, leaving the city with thousands of vacant housing lots and a huge debt. Even if the sales tax is approved, the city’s property tax levy will have to go up 8.6 percent next year. Without the sales tax, a property tax increase of nearly 87 percent would be needed to pay off the debt. That figure may make Junction City voters look more favorably at the proposed sales tax.
Looking back at the situation, city officials say they should have hired a city planner and financial adviser to help manage the expected growth. Estimates from the Pentagon and other sources, they say, prompted them to overcommit city resources. It probably didn’t help that the mayor at the time has since been convicted and sentenced to prison for accepting cash and gifts from developers.
In December 2006, the Wichita Business Journal reported that the Junction City and Manhattan area was expected to grow by 30,000 residents in the next five years. It said 6,000 homes or apartment units were under construction in Geary County, which had 50 active housing additions. In the previous two years, Junction City had annexed between 1,200 and 1,400 acres.
It was being called the state’s biggest economic boom ever, and people in Lawrence and other Kansas communities where the housing market was stagnant were a bit jealous. Developers and homebuilders from all over the state, including Lawrence, were rushing to extend their business reach into Geary County to get a piece of the action.
Unfortunately, the boom has not lived up to expectations, and Junction City officials and taxpayers have learned a hard financial lesson. The situation they now face certainly doesn’t inspire any jealousy from other Kansas communities.