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Archive for Saturday, October 15, 2011

Policy would require developments with special sales tax to post signs

October 15, 2011

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It is appearing more likely that if developments want to charge a special sales tax in Lawrence, they’ll have to post signs notifying shoppers of the higher rate.

Whether such signs will signal a change in Lawrence city commissioners’ attitude about the controversial special sales taxes is far less certain.

Commissioners at their Tuesday evening meeting will consider approving a new policy that requires the signs and makes several other changes related to special taxing districts.

But one city commissioner said he still doesn’t see the special taxing districts being very popular in the city.

“The first thing we need to decide is whether we are really ever going to be willing to use this incentive in Lawrence,” said City Commissioner Mike Amyx. “From the people I talk to who really don’t like this, I’m not sure when it is ever going to be appropriate.”

Commissioners will consider several changes to the policies for both Community Improvement Districts and Transportation Development Districts. The two districts allow businesses to charge a special sales tax that is used to help pay for costs associated with the development. Among changes up for discussion are:

• Requiring any establishment that charges a special sales tax to “prominently” display a sign at each public entrance that reads “Community Improvement District sales tax of X percent collected here.” The sign must be at least 8.5 inches by 11 inches in size.

The sign requirement also will apply to Transportation Development Districts. Of the two special taxing districts that currently exist in Lawrence — the Bauer Farm development at Sixth and Wakarusa and The Oread hotel near Kansas University — both are TDDs. The city originally believed it could make the sign requirement retroactive, which would require both of those developments to post the signs. But now the city’s legal staff advises the city does not have the authority to make those businesses post the signs. .

City Commissioner Bob Schumm — who made the idea of “sneaky taxes” a major issue in the last City Commission campaign — previously had proposed developments charging the tax have a sign that is visible from the road. But city staff members are recommending against that idea. They say it would detract from the city’s sign code, which places a strong emphasis on “minimizing exterior sign clutter.”

• Establishing a “but for” analysis that would require applicants who want a special tax to show that the project could not happen “but for” the help of a special tax. Applicants would be required to provide detailed financial data to the city’s economic development planner as part of the analysis.

• Requiring that projects meet at least three of the city’s four criteria for granting a special tax. Currently, the policy only requires one of the four criteria to be met. The criteria includes factors such as the uniqueness of a development, its ability to capture lost retail sales, its impact on tourism, and that it adds exceptional infrastructure to the community.

• Limiting the ability of special taxes collected through CIDs to be used for private development costs. The new policy would require that CIDs primarily be used to pay for public infrastructure like roads, sidewalks and stormsewers. But the policy would continue to allow the special tax revenue to pay for exterior enhancements of a building or landscaping that goes beyond what the city code requires. Under the current policy, CIDs could be used for some private, operational expenses such as advertising, security and other similar ongoing costs.

City Commissioner Mike Dever said he thinks the proposed changes could make the special taxing districts more palatable to some — especially the sign requirement that will make it clear to customers they’re paying a higher than normal tax rate.

“I’m not willing to go so far to say that I won’t use this type of incentive in the future,” Dever said. “When we have a chance to attract a business to Lawrence instead of watching it go to Topeka or Johnson County or some other community, we need to consider it. Those other communities are going to consider it.”

Commissioners meet at 6:35 p.m. on Tuesday at City Hall, Sixth and Massachusetts streets.

Comments

courtsider 2 years, 6 months ago

The first time I noted the higher taxes when I shopped at some 6th and Wakarusa stores, I decided that this was my last shopping trip there. I can't believe we are paying about 10% at some merchants in town. And some Commissioners think we should consider such ripoffs in the future? My, my.

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Richard Heckler 2 years, 6 months ago

I say we don't need more of anything else in Lawrence,Kansas. For several years.

Lawrence population is declining thus increasing the cost of living in the name of preparing for the future is not an attraction. And is without foundation. There is no hard evidence that Lawrence taxpayers are realizing the benefit of tax dollar handouts or of secret sales taxes.

Real estate profiteers certainly are cheering these hand outs on!!!

Why are taxpayers forced to support these questionable tax initiatives?

Let's instead rehab,repair and bring back to life our existing resources in the older neighborhoods. Of course there is opposition and fear because restoring the older beautiful neighborhoods would reduce sales in the new neighborhoods. The beautiful old growth and walkability of older neighborhoods is definitely more attractive.

Say NO to the sales tax fraud aka tax dollar handouts ! We've been duped for far too long!

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Richard Heckler 2 years, 6 months ago

Some retailers located in The Legends are charging the "secret sales tax" = a never ending government ordained profit by way of fraud.

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Richard Heckler 2 years, 6 months ago

"the simple fact is that in order to attract many businesses who are deciding between Lawrence and other locations such incentives are required. " Says who? Real estate profiteers... Incentives are tax dollar handouts that which small town Lawrence cannot afford. This is not the Kansas City metro.

I say some slick talking swindlers began convincing politicians tax dollar give aways were necessary so they could move their corporations from one community to another or can we say from one tax abatement/tax dollar give away to the next.

I say we don't need more of anything else in Lawrence,Kansas. For several years. Lawrence population is declining thus increasing the cost of is not an attraction.

Economic displacement = negative economic growth = increase in taxes and user fees = tax dollar give aways are failing.

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1983Hawk 2 years, 6 months ago

If Wyandotte County appears better off, it is at the expense of growth and development in Douglas, Johnson, Leavenworth and other surrounding counties, as the study indicates. And it occurred as a result of a direct government subsidy. Now Lawrence has been bled so dry, they feel compelled to divert more sales tax dollars to give to retailers and developers and was even asked with a straight face to give a property tax break to an Olive Garden, for God's sake, something that would've been unthinkable just a few years ago. But not in this newly accelerated race to the bottom to feed the insatiable appetites of the corporate welfare queens.

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1983Hawk 2 years, 6 months ago

Bzzzt. You lose. But thanks for playing. The notion of the NASCAR star bond district was sold in Topeka in the 90s as a "no lose" by diversion of receipts from hillbillies in Missouri and Arkansas who would drive here for the races and wouldn't have otherwise come to Kansas and spend here. Then Cabela's, Nebraska Furniture Mart, the minor league baseball stadium, Legends, the indoor oceans of fun like facility, etc. quietly were slipped into the "district". I suspect not everyone sitting at a T-Bones game on a Tuesday night came from out of state or might not have otherwise spent their money on entertainment in Lawrence or elsewhere in the state where the state actuall gets to keep the taxes and then decide what to do with them in lieu of having them funneled directly to corporate welfare. And check out the study that the state did about what happened to small furniture and appliance stores in Johnson, Wyandotte, Douglas, and Leavenworth counties after the tax-subsidized Nebraska Furniture Mart went in. So we bring a big multi-state corporation in with no guarantee their profits will be plowed back into our state, while simultaneously wiping out mom and pop businesses run by people who live here and who actually send their tax dollars they collect to Topeka to help pay for schools and roads. And we make sure all of this happens by PAYING them to do it to us by using tax dollars otherwise diverted from the schools and the roads and handed directly off to a major corporation. Sounds like a great economic development strategy to me! Yes, it has worked out horribly, as you indicate.

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1983Hawk 2 years, 6 months ago

Legends, who you note Lawrence is competing with, is even BIGGER corporate welfare queen living on taxpayer subsidies, because it is a special "STAR" bond district that gets to put the 6.3 percent STATE sales tax, as well as all local sales taxes, directly into the pockets of the developer by diverting it away from the state general fund before it even gets there (since it backs the bonds), removing all discretion of policymakers who might want to do something else with the state's own tax dollars. No, boys, it's all about direct subsidies which need to be given irrevocably to businesses to back 15-year bonds. And now it's a race to the bottom to "compete" with Legends with even more local tax subsidies. Ever notice it's just the most regressive tax used for this race to the bottom to see who can maximize corporate welfare the fastest, and income, earnings, or intangibles taxes are NEVER on the table?

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FalseHopeNoChange 2 years, 6 months ago

I'm holding out for Fuzzy Taco. Special tax me all you want. I want my Fuzzy Taco

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no_thanks 2 years, 6 months ago

Please don't say "so we can stay away from these places". You can choose to shop there or not shop there, but you most certainly do not speak for me (or the thousands of others who will decide on their own). While I'm not a fan of public incentives, the simple fact is that in order to attract many businesses who are deciding between Lawrence and other locations such incentives are required. This community embrace's the idea of allocating scarce government resources by supporting Community Theatre, the Lawrence Community Shelter, saving SRS, funding a better library, etc...The challenge going forward is how do we continue to support such organizations, along with all the other services provided by the City without a growing tax base (the entities being supported are all going to require additional funding as the Community Theatre, Library, and Community Shelter are not going to be able to cover their annual expenses). I don't know the answer to raising more tax revenue, but I do know this, Lawrence isn't that appealing of a town to attract new investment without public incentive. Our retail locations, largely, are not attractive, especially when competing against the Legends and/or Town Center (119th & Nall). In fact, there are many parts of our town that are in decay, and a CID, in my opinion,may be the right incentive to stimulate private investment in investing in the exterior/infrastructure of these parts of town. The best feature about the CID is that municipal governments do not bear opportunity costs as the owner of the building bears the capital investment risk and must provide a product or service that attracts customers. In the interim, we receive full property taxes on what should be a much higher assessed value due to the investment in the property. There is no additional services that would be added as the City would already be serving the existing building. Now, I don't believe the CID should be used for "greenfield" projects, rather, it should be used to invest in existing buildings in need of updating/repair. Point being, we better learn to embrace some incentives to attract businesses, or we are going to fall into further decline given our inability to grow as a community.

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Richard Heckler 2 years, 6 months ago

Online shopping may be the ultimate impact ----- something to think about. No sales tax and no vehicle air pollution.

How stupid can some business people be?

Here’s what happens. (THIS IS ALL ABOUT LOCAL DEVELOPMENT)

David Cay Johnston then boggled the crowd with a blunt assertion: "We pay billions of dollars in taxes that never get to the government." It's just one of the many swindles developers 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.

Why do city governments take such a blatantly bad deal?

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.

Other scams Johnston noted:

* Market electricity, which is now the policy in 28 states and the District of Columbia—and causing prices to rise higher and faster than in non-market states.
* George W. Bush's personal fortune, almost all of which came from the deal he fronted to buy the Texas Rangers, build a new stadium using public funds, and then sell it at a profit. (Oh: and when it came time to pay the taxes on his windfall from the deal, he shorted the government $3 million on his tax returns.)
* The use of legislation to override large court awards granted to victims of corporate misbehavior. Our own legislatures and Congress are relieving corporations of these debts, and accepting them on behalf of the taxpayers.
* The use of court decisions to limit liability. Johnston cited the recent Supreme Court case affirming that discrimination claims can only be filed within six months of the incident—which is useless if you don't find out until years later that the company was paying you less because of your race or gender.
* CEOs being paid vast amounts of money—even if their companies' performance declines. Much of this extravagant compensation comes right out of the pockets—or, more likely, the benefits packages—of the people on the shop floor. "They say they have to cut benefits to stay competitive," said Johnston. "But the competition is not coming from the shop down the street—it's between the executive floor and the shop floor."

Johnston says that the media doesn't explain this because reporters these days don't really know how government works.

http://www.uua.org/events/generalassembly/2008/commonthreads/115777.shtml

http://www.democracynow.org/2008/1/18/free_lunch_how_the_wealthiest_americans

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LJ Whirled 2 years, 6 months ago

The secret CID tax/kickback is terrible public policy, both on its face and as implement in Lawrence.

Taxing local businesses to bring in corporate chains to unfairly compete against them, duping consumers in the process.

Who thought that made sense?

Swear it off. Take the cure. Repeal it and never do it again.

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Richard Heckler 2 years, 6 months ago

Why does City Hall and City Commissioners support consumer fraud?

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Richard Heckler 2 years, 6 months ago

Why are retailers afraid to advise consumers of their policies?

Isn't it consumer fraud not to reveal the additional sales tax?

Throw the culprits in the clinker then have city hall put the signs at each and every entryway and at all cash registers!

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Liberty275 2 years, 6 months ago

Bad idea.

Better idea: make EVERY business post an 11x17 sign in a prominent place showing what tax you will be paying on your purchase and what government entity or entities will receive that tax.

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budwhysir 2 years, 6 months ago

yeah what a great idea... Ask the local business that are trying to drive away customers to advertise this on the door. Doesnt matter to me, I am making my own list and if it is more expensive for me to shop at one place and get the same thing I can get for less money at another, I put that place on my list and never go back.... If you put up a sign they will just add another 5% to your bill and tell you it is an advertising fee....

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1983Hawk 2 years, 6 months ago

The one proposed reform that the corporate welfare queens will NEVER allow to pass now that they are able to directly access public taxes on an irrevocable and priority basis (the governmental entities have NO discretion to do anything else with these taxes, since bonds are usually involved and underwritten with the sales taxes and you can't later change your mind and defeat bondholders' contract rights under the US Constitution) is the "but for" test. We certainly can't allow any kind of cost-benefit analysis prior to giving the business boys this kind of permanent, direct, priority access to the public's taxes, especially the most regressive of all taxes, notwithstanding how much the suits stand there continuing to shake their fists and yell about how inefficient and mismanaged government is and how it needs to be run more like a business. Ignore that hypocritical little man behind the curtain and listen to the great Oz: "but for" tests will NOT be allowed.

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Lori Nation 2 years, 6 months ago

Is there a list of these special businesses?

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CLARKKENT 2 years, 6 months ago

THE SIGNS NEED TO GO UP, SO WE CAN STAY AWAY FROM THOSE PLACES.

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Lynn731 2 years, 6 months ago

I will never knowingly do business with a special taxing district. I need to know, however, so signs are mandatory in my book. Without consumers knowing, we are flying in the dark. Please require signs so consumers are treated fairly, otherwise we are being screwed and do not even know it. Thank you, Lynn

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Ron Holzwarth 2 years, 6 months ago

"But one city commissioner said he still doesn’t see the special taxing districts being very popular in the city."

I don't understand why not. Just about everyone wants to pay higher taxes, don't they?

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