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Archive for Saturday, June 11, 2011

Analysis shows Lawrence has high local tax burden

June 11, 2011

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For a moment, consider yourself Joe or Jane Average. You live in an average-priced home and you receive an average wage.

So, what major Kansas city should you live in if you want to pay the least amount of local taxes?

A new set of numbers and an analysis by the Journal-World suggest it is not in either one of the state’s two major university communities. Using numbers compiled by the League of Kansas Municipalities, the Kansas Department of Revenue and the U.S. Census, the analysis found that local taxes in Manhattan and Lawrence were higher than in any other Kansas city of more than 40,000 people, when measured against the average wages paid to full-time workers in each city.

Each year, the League of Municipalities publishes the total property tax rates — the mill levies charged by city governments, county governments, school boards and other miscellaneous taxing agencies — for every city in the state. The Journal-World took those numbers for the 11 cities in the state that have populations of at least 40,000 people. We also gathered sales tax rates for each city, median home prices for each city and the median annual wage for a full-time, 40-hour-per-week worker in the city.

Then, we tried to make sense of it all. Let us walk you through what we found.

Property tax rates

When it comes to the mill levy charged by local governments, Lawrence’s total is the fourth lowest of the 11 cities above 40,000 people.

  1. Overland Park: 113.91 mills

  2. Wichita: 120.55 mills

  3. Salina: 123.14 mills

  4. Lawrence: 123.40 mills

  5. Shawnee: 126.19 mills

  6. Manhattan: 127.57 mills

  7. Lenexa: 129.35 mills

  8. Olathe: 131.09 mills

  9. Topeka: 147.42 mills

  10. Hutchinson: 169.80 mills

  11. Kansas City: 171.89 mills

Home values

How much your home is worth, of course, plays a major factor in how large your property tax bill will be. We used median home values as determined by the U.S. Census Bureau’s American Community Survey. (For you data geeks, we used the five-year estimates that were gathered from 2005 to 2009. They’re the most recent numbers available and also are considered the most reliable because they use the largest sample size.) Lawrence had the fifth highest median home values.

  1. Overland Park: $220,400

  2. Lenexa: $214,200

  3. Shawnee: $196,100

  4. Olathe: $190,300

  5. Lawrence: $168,100

  6. Manhattan: $155,200

  7. Wichita: $108,100

  8. Salina: $104,500

  9. Kansas City: $93,100

  10. Topeka: $91,300

  11. Hutchinson: $84,900

Sales taxes

When Lawrence voters approved a trio of sales tax increases in 2008, the city’s total sales tax rate rose to become the fourth highest of the 11 large cities. (Note: These rates don’t include special taxing districts that some cities allow. For instance, Kansas City has 11 special taxing districts, which allow up to 10.02 percent in sales tax to be charged in some areas. Lawrence has two special taxing districts that charge 9.85 percent)

  1. Wichita: 7.3 percent

  2. Hutchinson: 8.05 percent

  3. Salina: 8.2 percent

  4. Manhattan: 8.55 percent

  5. Overland Park: 8.65 percent

  6. Olathe: 8.65 percent

  7. Shawnee: 8.775 percent

  8. Lawrence: 8.85 percent

  9. Lenexa: 8.9 percent

  10. Kansas City: 8.925 percent

  11. Topeka: 8.95 percent

Median wages

Taxes are kind of relative. A tax bill of $500 isn’t nearly as painful to someone who makes $100,000 a year as it is to someone who makes $20,000 a year. Again, we used the American Community Survey to find median wages for workers in each city. We know that some wage figures for university towns end up looking really low because of the number of students who either don’t work or get paid very little to work. So we used a number that measures the median average annual wage for a male, full-time, year-round worker. That’s our best effort to factor out the student effect. (We used the male number instead of the female because the margin of error was lower for the male data. For some reason, the Census doesn’t average the two together for us.) Lawrence was right in the middle of the pack when it comes to full-time wages.

  1. Overland Park: $63,675

  2. Lenexa: $57,584

  3. Olathe: $57,366

  4. Shawnee: $55,530

  5. Wichita: $43,996

  6. Lawrence: $40,572

  7. Topeka: $40,260

  8. Hutchinson: $38,647

  9. Salina: $37,589

  10. Manhattan: $36,416

  11. Kansas City: $36,224

Totaling it up

Here’s what we did to try to make sense of this. We figured how much a person who lives in an average-priced home would pay in property taxes in each city. Then we assumed that person would spend $5,200 a year on groceries (don’t get hung up on the number — we just needed something to compare), and we figured the sales tax on those purchases for each community. Lawrence has the fifth-highest tax bill.

  1. Wichita: $1,498 property, $379 sales = $1,877 total

  2. Salina: $1,479, property, $426 sales = $1,905 total

  3. Topeka: $1,547 property, $465 sales = $2,012 total

  4. Hutchinson: $1,657 property, $418 sales = $2,075 total

  5. Kansas City: $1,840 property, $464 sales = $2,304 total

  6. Manhattan: $2,276 property, $444 sales = $2,720 total

  7. Lawrence: $2,385 property, $460 sales = $2,845 total

  8. Shawnee: $2,845 property, $456 sales = $3,301 total

  9. Olathe: $2,868 property, $449 sales = $3,317 total

  10. Overland Park: $2,887 property, $449 = $3,336 total

  11. Lenexa: $3,186 property, $462 sales = $3,648 total

Relativity test

As we mentioned before, taxes are relative. So we took the totals from above and compared them with the average wage totals for each city. Then we expressed the result as a percent. The lower the percentage, the less tax burden a person has. This is where Lawrence started to fall below average. (Note: Don’t make too much of the actual percentages. They are highly dependent on the assumption that the average person only spends $5,200 on taxable sales. That’s likely low. What’s meaningful, we hope, is how the communities rank compared with one another.)

  1. Wichita: 4.2 percent

  2. Topeka: 4.9 percent

  3. Salina: 5.0 percent

  4. Overland Park: 5.2 percent

  5. Hutchinson: 5.3 percent

  6. Olathe: 5.7 percent

  7. Shawnee: 5.9 percent

  8. Lenexa: 6.3 percent

  9. Kansas City: 6.3 percent

  10. Lawrence: 7.0 percent

  11. Manhattan: 7.4 percent

Make what you will of the numbers. But don’t ponder any of it too long. The city, the county and the school district’s tax rates all will change soon enough. All three governments will discuss their tax needs as part of their budgeting processes that will run throughout the summer.

Comments

jafs 3 years, 6 months ago

This is not news at all.

The costs of living in Lawrence have always been high relative to the average wages here.

Some of this has to do with the bedroom community factor - people live here and work somewhere else where they can get higher wages, and/or live elsewhere where costs of living are lower and work here.

somebodynew 3 years, 6 months ago

While a well written article, this should have been a Rock Chalk, Duh !!!!

All you have to do is live here for a little and do normal travelling and you can figure it out. Nice to see the numbers, though.

Flap Doodle 3 years, 6 months ago

The government needs more money to support the takers. Give generously, citizens.

CountyResident 3 years, 6 months ago

Who do you think are the takers? I noticed that this week the City of Lawrence is scheduled to approve over $3,300,000 in street repairs. Does this mean that people who drive on the streets are takers? Maybe we should all leave are cars in the garage and take the bus or walk.

booyalab 3 years, 6 months ago

All that means is that the city does not consider street maintenance to be a routine task for local government. They leave it until they need, or say they need, millions of dollars for it and then it has to be approved in a special session. It's not reassuring for a central function of government to be ignored until it's a major emergency.

Crazy_Larry 3 years, 6 months ago

Preemptive Happy Flag Day to you!

June 14th Flag Day 2011 watch?v=hnHqysaVnS0

Truth does matter.

George Lippencott 3 years, 6 months ago

Thank you Chad for a well written and comprehensive article. It is a shame that our tax at all cost hoard avoids anything that suggests their opponents might have a case.

BigPrune 3 years, 6 months ago

More taxes need to be raised, much more taxes. Please raise our taxes!!!!

It's all about our "quality of life."

slowplay 3 years, 6 months ago

"Taxes are the price we pay for civilization." Oliver Wendell Holmes Jr.

I love Lawrence, I'm proud to live here and will continue to support this community through taxation and volunteerism.

George Lippencott 3 years, 6 months ago

This comment was removed by the site staff for violation of the usage agreement.

shawn1040 3 years, 6 months ago

I'm SO glad I left Lawrence! Fishers, Indiana(suburb of Indianapolis) is way better! 7% sales tax is awesome!!

shawn1040 3 years, 6 months ago

I mostly read it for comic relief. Larryville is a joke! Keep drinking the kool-aid guys, Obama will save you all!

gl0ck0wn3r 3 years, 6 months ago

These comments always make me laugh because it exposes what the Lawrence faux elite really think. Don't agree with them? Get out and take your money with you. It's a very tolerant attitude. The comments are particularly hilarious when coupled with that sneering reference to a "lesser" city like Olathe, Leawood or Lenexa.

jafs 3 years, 6 months ago

I get your point, but it also seems silly for people who don't like Lawrence to live here, when there are many other places that offer what they're looking for.

If somebody prefers the benefits/drawbacks of Olathe, etc. to those of Lawrence, it would make more sense for them to live there than here.

Sunny Parker 3 years, 6 months ago

Don't forget that awsome empty "T" and that glorious empty Library we will soon have!

funkdog1 3 years, 6 months ago

All of you library naysayers need to get off your butts and actually get down to the library. The library is almost always PACKED with people. Just because you don't go there doesn't mean that thousands of others don't.

kernal 3 years, 6 months ago

Funkdog, I do get my "butt" down to the library at least twice a month. Still think we don't need the expansion.

jafs 3 years, 6 months ago

Yes.

The real question is how we compare to other similarly sized and situated college towns with similar amenities.

George Lippencott 3 years, 6 months ago

Why college towns? Becasue there is a college here we shoul dpay more taxes?? One would think that the college would offer opportunitiies to all of us so that we would not have to tax ourselves as much as a non -college town???

jafs 3 years, 6 months ago

I'm sorry George, but I think it's better if we don't continue discussing these things.

It seems to upset you, and it's not very productive.

hipper_than_hip 3 years, 6 months ago

According to budget documents submitted by Chief of Police last week to the City, Lawrence has a similiar crime rate to Topeka or Wichita, which are two much larger cities.

kernal 3 years, 6 months ago

That $168,100 median home value is now $154,000 to $155,000. No wonder we can't move real estate in this town. Some people owe more than what their house is now worth. Very painful.

I sure would like to hear a seasoned realtor's take on this. Truth or dare?

monkeyhawk 3 years, 6 months ago

I heard from a very reliable source that only 18% of all houses on the market sold in Lawrence last year. Pretty bleak for those wanting to get out.

BigPrune 3 years, 6 months ago

...and of that 18%, over 60% were sold as foreclosures or short sales.

George Lippencott 3 years, 6 months ago

About 25 % nationally. At least two of my neighbors who can not move their homes on the market for what they owe or for that matter what the county appraises the property.

Scott Morgan 3 years, 6 months ago

A mover and shaker Missourian and good friend is in the market and real estate often reminds me his group doesn't even consider investing in Douglas County. He claims over regulated and "cousin" deals make it very difficult to earn money.

I'm sure the Olive Garden folks see it this way.

From personal experience when building a home on acreage. We had planned on putting a tiny one bedroom (-500 sq. ' ) efficiency apartment in our garage. Ironically just in case the economy turned south and a relative needed a temp. place to live. It did in both cases.

Long story short, was told to cease buidling it or the entire home would not pass inspection. A few months later noticed another individual who works for the city did just what we wished. No there was no mention of anything extra on the posted permit.

George Lippencott 3 years, 6 months ago

Hey JAFS

I have heard this from many people. Could there be some truth that we are overtaxed to provide corporate welfare to friends and neighbors?? Could we be overtaxed because we provide greater social services than many other cities our size?? Are we over regulated to the point of discouraging investment without subside? Do people want to live in a town where when a bunch of noisy kids complain a minority of taxpayers are assigned to service them involuntarily?

Just maybe the majority of whom you are so proud really don’t care about the future of the town but care about instant gratification for themselves for the short time they are here?

jafs 3 years, 6 months ago

I'm sorry, but it seems fruitless and pointless to discuss these things with you.

It just seems to upset you, and isn't very fruitful.

You seem very unhappy here - I wish you happiness.

jmadison 3 years, 6 months ago

Including the cost for water and sewer for each city would also have been helpful, as one could consider these fees as part of the tax structure of each city.

rhd99 3 years, 6 months ago

If I am missing something, please tell me. I noticed that gas prices are higher here in Lawrence than in Topeka. Why?

ksriver2010 3 years, 6 months ago

At first I read the headline and a couple of the points and I responded "Duh!" Lawrence does have very high sales taxes, property taxes, gas prices, and I believe that there is also a higher local minimum "living" wage, which drives up prices. And, as several have already posted, many people would even welcome more taxes to fund other stuff. But, looking at the data above, the numbers don't add up. West Lawrence is a bedroom community for Topeka, and the wages are not good (state workers). Median wages are skewed because so many people live here but don't work here (or would that be correctly displayed on census info?). Another example of census info used for the wrong reasons. And why I refuse to answer anything on the census except number of people in household, gender, and ages.

George Lippencott 3 years, 6 months ago

Good points but they do not undermine the fact that we pay a lot of taxes. Just what do we have that other cities are size do not?

jafs 3 years, 6 months ago

It seems that living in Lawrence is a bad deal for you.

I wish you happiness.

jafs 3 years, 6 months ago

Good luck with everything George.

I'm sorry you're so frustrated and unhappy here, but I don't think I can help you with that.

I've tried, but it doesn't seem to work.

BlackVelvet 3 years, 6 months ago

High Liberal-leaning population equals high taxes.

notaubermime 3 years, 6 months ago

I think it was a fairly admirable attempt to weed-out the effect of college students in this analysis, but with Manhattan and Lawrence taking the two top spots in tax burden by a fair margin, it is fairly obvious they failed (or at least it should be obvious). I have a couple of ideas as to why:

First, their exclusive criteria only minimizes the effect of low-earning students. Even if they had succeeded in eliminating 75% of the students with those criteria, that still leaves a sizable portion of those communities workforces.

Second, students need stuff, cheap stuff. Students can be a major economic driver in Lawrence and Manhattan, but the jobs that are benefiting from them are low income jobs. Even if students are not the ones working those jobs, somebody will and those incomes will bring down the average.

Finally: property values. Lawrence's property values are 4.14 times the average annual income. Manhattan is even higher at 4.26. The other cities? Overland Park - 3.46, Lenexa - 3.72, Shawnee - 3.53, Olathe - 3.32. Wichita - 2.46, Salina - 2.78, Kansas City - 2.57, Topeka - 2.27, Hutch - 2.20. If you look at the actual mills, Lawrence and Manhattan tax at a low to average rate. What sets them apart is that their property values are so far beyond their income. My guess is that part of this comes from income deflation by having so many college students, but another reason is that renting houses to college students is driving up prices.

It just costs more to live in a college town. Surprise, surprise.

jayhawklawrence 3 years, 6 months ago

I think lawrence is also unique in the fact that so many people drive to kc to work. That is a big expense not calculated in this analysis.

George Lippencott 3 years, 6 months ago

Wow, after over 3000 posts I have been nailed for being inappropriate. Since the post is gone, I have no idea what I wrote. So, I apologize for violating the rules and for whatever hurt I caused Mr/Mrs. SlowPlay.

monkeyhawk 3 years, 6 months ago

George - the first one hurts the most!

IMHO, the reason taxes, properties, cost of living is higher in college towns is because they are not only liberal strongholds, they are run by ideological academics, either overtly or covertly. These academics see the cities as petri dishes for their experimentation and theory. witness merrill's favorite spam subject.

George Lippencott 3 years, 6 months ago

I would mention faculty wives who in the cutthroat faculty world see a need to do "good works" which usually translates to a three letter social service organization drawing from our taxes.

notaubermime 3 years, 6 months ago

Uh... well... no, nevermind. There really isn't much point in rebutting a person who thinks Manhattan is a "liberal stronghold".

Kontum1972 3 years, 6 months ago

why a library..everyone is using Kindle..thats more cool that a stinking bldg.

gl0ck0wn3r 3 years, 6 months ago

You laugh, but it would actually cost less to buy 80,000 Kindle 3G devices (assuming no discount) than to spend $18 million on the library.

unite2revolt 3 years, 6 months ago

Its really just a matter of supply and demand. Lawrence offers a place to live and there are people that want to live here, those people are willing to pay higher taxes to keep the community the way they want and keep undesirables from moving into the neighborhood. If you want to pay lower taxes by all means feel free to live somewhere else, like Topeka or Salina. You get what you pay for in the end, but people griping about how the taxes are too high is just buyers remorse.

George Lippencott 3 years, 6 months ago

Would be true if everyone here paid those higher taxes.

unite2revolt 3 years, 6 months ago

You caught me, I'm living the high life on your tax dollar. I understand where you are coming from though. Thanks for making Lawrence a nicer place to live for my freeloading family.

George Lippencott 3 years, 6 months ago

unite2revolt (anonymous) replies…

Cheep shot that avoids the issue. If you want it you pay or it. Good old American way

jafs 3 years, 6 months ago

Yep.

That's how it looks to me.

For whatever reason, college towns are more desirable to a bunch of people than other towns, which is why they're pretty much always more expensive to live in.

George Lippencott 3 years, 6 months ago

Really?

Doesn't have anything to do with a university academic crowd with annual increases in salary greater than inflation who are willing to give a portion back in tax increases for things they want regardless of any impact on those who have no such increases.

Then there are the short term renters with high demands and no concern for the long term consequences and little direct consequence themselves.

Then there are the teacher unions who want their increases to cover the tax increases. Somehow those increases will improve education???

How come the public sector in Lawrence seems to be doing better than the private sector??

Very smart liberals!!

jafs 3 years, 6 months ago

You know I'm not going to respond to this.

Why do you continue to want to engage me in this kind of conversation?

jafs 3 years, 6 months ago

And, you're revealing your anti-liberal feelings.

You might want to be more careful, if you want people to consider you "moderate".

George Lippencott 3 years, 6 months ago

Really?

Doesn't have anything to do with a university academic crowd with annual increases in salary greater than inflation who are willing to give a portion back in tax increases for things they want regardless of any impact on those who have no such increases.

Then there are the short term renters with high demands and no concern for the long term consequences and little direct consequence themselves.

Then there are the teacher unions who want their increases to cover the tax increases. Somehow those increases will improve education???

How come the public sector in Lawrence seems to be doing better than the private sector??

Very smart liberals!!

George Lippencott 3 years, 6 months ago

Et al

Somebody has to give up something if you raise their taxes. If everybody gives up a little it is not so painful. If only a few are asked to sacrifice then one needs to question whether we are being progressive or communist.

Everything in life has limits - even taxes. Restoring state cuts with property tax funding is an increase in taxes as there was no state tax cut. On the contrary both the state and the county raised taxes last year.

Just because something is attractive or helpful does not mean we should fund it. We take a lot of money from some people. Is that fair? Just how much do we intend to take?? Would all of it be enough?

MyName 3 years, 6 months ago

I don't get all the vitriolic comments about a 1-2% difference between tax burdens in Lawrence and those in Topeka or KC. Another interesting point is that when it got whittled down the article only compared male incomes (see Median Wages) which would also skew the relative differences since Lawrence has much fewer blue collar jobs than Topeka or KC.

Richard Heckler 3 years, 6 months ago

Our city's current budget crunch could easily be tied directly to infrastructure expenses needed to serve new housing developments. The community is way over extended in this regard.

If reckless residential growth paid for itself and was financially positive, we would not be in a budget crunch. But with increased numbers of residential you have increased demand on services, and historically the funding of revenues generated by residential housing does not pay for the services, they require from a municipality.

Reckless growth has been rightly blamed for many things: destroying green space, increasing air and water pollution, fracturing our neighborhoods and poorly designed NEW streets forcing us to drive for every chore.

But there is one consequence that usually goes unmentioned - reckless growth is draining our pocketbooks and raising our taxes.

We've subsidized reckless growth at such a basic level for so long, that many people believe the status quo is actually fair and neutral. This is false-what we think of as a level playing field is tilted steeply in favor of reckless growth developers.

Reckless growth wastes tax money. Can we say NO to upcoming tax dollar assistance from our local tax dollar moochin Chamber and their partners in moochin aka reckless growth developers.

Flap Doodle 3 years, 6 months ago

"...And there is another type of Caps Lock user who doesn’t capitalize whole sentences but INSTEAD capitalizes a few SPECIFIC words for EMPHASIS. Now read a sentence like that aloud, shouting every time you come to a capitalized word, and tell me you do not sound like an absolute freakin’ lunatic. This method can turn even basic known facts into crazy-sounding gibberish (“The SQUARE of the HYPOTENUSE of a RIGHT triangle equals the SUM of the squares of the OTHER two sides”)..." http://pajamasmedia.com/blog/tips-for-not-appearing-crazy-on-the-internet/?singlepage=true

Richard Heckler 3 years, 6 months ago

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

http://www2.ljworld.com/news/2009/jul/24/retail-space/?letters_to_editor

George Lippencott 3 years, 6 months ago

Hey merrill

Raise taxes and solve all problems

Richard Heckler 3 years, 6 months ago

http://www.cnbc.com/id/43395857

US Housing Crisis Is Now Worse Than Great Depression

by: Jeff Cox CNBC.com Staff Writer Published: Tuesday, 14 Jun 2011 | 12:04 PM ET

It's official: The housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression.

Prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that began in the late 1920s and culminated in the early 1930s, according to Case-Shiller data.

The news comes as the Federal Reserve considers whether the economy has regained enough strength to stand on its own and as unemployment remains at a still-elevated 9.1 percent, throwing into question whether the recovery is real.

"The sharp fall in house prices in the first quarter provided further confirmation that this housing crash has been larger and faster than the one during the Great Depression," Paul Dales, senior economist at Capital Economics in Toronto, wrote in research for clients.

According to Case-Shiller, which provides the most closely followed housing industry data, prices dropped 1.9 percent in the first quarter, a move that the firm interpreted as a clear double dip in prices.

Moreover, Dales said prices likely have not completed their downturn.

"The only comfort is that the latest monthly data show that towards the end of the first

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