It is time once again to try to answer the question that just never goes away: Are taxes too darn high here?
Whoa, let's not all talk at once. Instead of people pounding tables and throwing coffee cups, I thought we would try to look at some numbers. Don't worry, I'll do the arithmetic. (They're big numbers, so I've already added extra beads to my abacus.)
About the numbers
We compare the 16 communities in Kansas that have populations of 25,000 or more. The tax rate data comes from the League of Kansas Municipalities' most recent tax rate data book. The housing and income data are five-year averages from the most recent American Community Survey, which is conducted by the U.S. Census Bureau.
But before we get into the numbers, here's a reminder of why now might be a good time to have this discussion. Lawrence city commissioners are having serious talks about whether to place a sales tax increase on the November ballot. The tax — the amount hasn't been specified yet — would pay for a new police headquarters building and perhaps some other projects. A property tax increase for the headquarters hasn't been completely ruled out either. In addition, at least one commissioner has proposed a small property tax increase to fund sidewalks, trails and other such improvements.
Also, it wasn't long ago that we reported new federal numbers showing that Lawrence was the most expensive metro area in the state in many regards. That news didn't thrill anyone, but one comment I heard from several local government officials was: At least our tax rates aren't that high compared to other Kansas cities.
Well, that may be, but let's get the abacus out anyway.
Property tax rates
This is a look at the total property tax rate for communities. That means, city, county, school district and other agencies such as fire districts, cemetery boards and other such entities that exist in some communities. Indeed, out of the 16 communities viewed, Lawrence has one of the lower property tax rates in the state. Maybe those government folks knew of what they spoke.
Highest property tax rate: Dodge City: 188.27 mills
Lowest property tax rate: Overland Park: 113.71 mills
Median: 135.15 mills
Lawrence: 11th highest rate out of 16; 126.54 mills
Property tax rates and housing values
Welcome to the David Copperfield part of the show. Here's an example of how with just one twist here and one turn there, an item can be much different than it first appeared. With property taxes, the twist is housing values. The average home doesn't cost the same amount in each of these 16 communities. If you don't believe me, take your $100,000 and let me know how you like your cardboard box in Leawood. So, I used census data that measures the median home price in each community, and then calculated the property taxes that would be due. Lawrence doesn't fare as well on this list, but it is still somewhat in the middle of the pack.
Highest total tax: Leawood: $5,745.
Lowest total tax: Wichita: $1,684
Lawrence: No. 7 out 16; $2,568
The income equation
The average income in all these communities also is not the same. If you don't believe me, take your saltines and spam to the average Leawood cocktail party, and let me know how that goes. So, I took some earnings numbers from the census. This was kind of tricky. I used a figure that measures the median earnings for a full-time, year-around worker in each community. (Technically, it is a male worker. Data that combines the average earnings for females and males were a little tougher to get a hold of for each community.)
I used this number because more ordinary numbers, like per capita income, catch a lot of college students in Lawrence who don't have much income because they are still being supported by their parents. I think those numbers artificially deflate Lawrence's income totals, so I was looking for a way to avoid that.
One last caveat: This method really is just a way to rank the communities. It isn't meant to show how much of the average household's paycheck goes towards property taxes. I recognize many households have dual incomes. For the purpose of this ranking exercise, we're using only the income of an average, year-around, full-time male worker. So, while the percentages may not be as meaningful as I would like, I believe the ranking of the communities is meaningful.
As for the results, Lawrence doesn't finish where many folks would like.
Highest: Manhattan; 6.56 percent of income toward property taxes
Lowest: Wichita: 3.66 percent of income toward property taxes
Median: 4.96 percent of income toward property taxes
Lawrence: 2nd highest; 5.74 percent
Sales Tax Rates
When it comes to funding a new police headquarters that could total $30 million, a new sales tax is the leading candidate in Lawrence. Currently, Lawrence is a middle-of-the-pack community in terms of its sales tax rate. But, if Lawrence adds a 0.2 percent sales tax — the lowest amount mentioned thus far for a police headquarters — Lawrence would have the third-highest sales tax of the 16 communities. (That's assuming other communities don't raise their rates, too.) Any addition above a 0.7 percent sales tax would give Lawrence the highest sales tax among the 16.
Highest: Junction City: 9.4 percent
Lowest: Wichita: 7.15 percent
Median: 8.66 percent
Lawrence: 8th highest out of 16; 8.7 percent
The Whole Ball of Wax
It would be good if we could somehow tie the property taxes and the sales taxes together to create an overall picture of the tax burden of a community. In all honesty, that is tough trick to pull off. (I suppose that's why Copperfield gets paid the big bucks.)
I tried a few methods, but here is the one I settled on: I have a list that ranks each community based on how much property taxes an average homeowner pay as it relates to his income. I have a list that ranks the communities based on their total sales tax rate. If a community ranks well on both lists, that is probably a lower tax community. If a community ranks poorly on both lists, that is probably a higher tax community.
So, I gave each community points based on how they landed in each list. The higher the point total, the lower the tax burden. Here's an example: Lawrence had the second highest percentage of property taxes paid compared to its income: so, two points. It had the 8th highest sales tax rate: so, eight points. That's a grand total of 10 points, if the abacus is correct.
When I did that for every community, here is how it came out from best score to worst:
- Wichita: 32
- Hutchinson: 27.5
- Salina: 25
- Overland Park: 23.5
- Leawood: 22.5
- Garden City: 20
- Topeka: 18.5
- Shawnee: 18
- TIE Lenexa: 14; Olathe: 14
- Manhattan: 13.5
- Kansas City: 11
- TIE Lawrence: 10; Leavenworth: 10
- Dodge City: 8.5
- Junction City: 4
So, are taxes too high in Lawrence. The honest and simple answer is: I don't know. You'll have to figure that out.
And, you'd better get started. You may be asked to decide in November.