Most tax increases put to Lawrence voters in recent years have passed with large margins, but one local group wants voters to think twice about the city’s request to renew a special citywide sales tax.
Patrick Wilbur, treasurer of local political advocacy group Lawrence Sunset Alliance, said the city’s proposal isn’t the best it can do.
“Saying sales tax is the only way to cover services is kind of like saying there is only one way to score a touchdown,” Wilbur said. “There’s a variety of ways that the city can be creative here, whether it’s through the general budget, a smaller sales tax, or whether we just look at things item by item.”
Coverage: 2017 sales tax ballot questions• Aug. 21 — Renewal of transit sales tax the ‘ultimate question’ for city bus service
• Sept. 10 — Renewal of infrastructure sales tax puts $63 million in projects on the line
• Sept. 18 — Lawrence voters to decide whether city should triple spending on affordable housing
• Sept. 25 — Local group wants Lawrence residents to vote against $116M citywide sales tax renewal
• Sept. 25 — Faith group wants Lawrence residents to vote yes on affordable housing sales tax
Voters passed the city’s extra .55 percent sales tax with strong support in 2008. Almost three-quarters of city voters, or 73 percent, approved the measure.
In November, voters will be asked to renew the sales tax instead of allowing it to sunset. If approved, the special tax would be in place from 2019 to 2029 and is projected to generate more than $116 million for city infrastructure, transit and affordable housing.
Hayden Maples, chair of the LSA, wants to be clear that the group isn’t opposed to funding infrastructure, transit or affordable housing but is instead advocating for a different approach to funding.
“We know infrastructure is important, we know public transportation is important and we’re all for affordable housing,” Maples said. “We’re just not sure these are the right approaches.”
Comparing Kansas and Lawrence tax rates
With state, city and county sales taxes, Lawrence residents pay 9.05 percent on their purchases, which in Kansas includes groceries. The sales taxes up for renewal are in addition to the 1 percent general city sales tax and the 1 percent county tax, of which the city gets the majority.
The average sales tax rate in Kansas is 8.6 percent, making it one of the highest in the U.S. Specifically, Kansas has the eighth-highest average sales tax rate in the country, topping the average rate in states such as New York, California and Texas. Regionally, Kansas’ rate surpasses the average rates of some Midwestern states by as many as 3 percentage points.
At 9.05 percent, Lawrence’s local sales tax rate is on the higher end in Kansas. Salina, for instance, has a rate of 8.75 percent and Wichita a rate of 7.5 percent. Lawrence’s rate is surpassed by cities such as Kansas City, Kan., Topeka and Olathe, which have rates of 9.125 percent, 9.15 percent and 9.475 percent.
Sales tax collection, though, is key to the city’s budget, accounting for 40 percent of the general fund’s revenue this year. City staff has said major adjustments will have to be made to the budget if the renewal doesn’t pass. That includes reducing or deferring infrastructure projects, significantly reducing the city’s bus service, and providing less funding to address the city’s affordable housing shortage.
Considering low-income residents
Maples said comparisons to sales tax rates of other cities are shocking.
“For a community that considers itself to be progressive, that’s pretty high,” Maples said.
Wilbur and Maples said the main reason the group is opposed to the sales tax is because it’s regressive, meaning that unlike property taxes — where those with more expensive properties pay more overall — sales tax disproportionately burdens those with lower incomes.
Increasing the sales tax also hasn’t meant property tax relief for Lawrence residents. In fact, the city’s property tax rate grew faster in the decade after the current sales tax was passed than the previous 10 years. From 1998 to 2008, the city’s mill levy rate increased by about 16 percent. From 2008 to 2018, the time span of the current sales tax, the property tax rate will have increased by about 20 percent.
Other local property tax rates are also set to rise next year. Together, Lawrence residents will see a property tax increase of about 6.67 mills in 2018: 1.25 mills from the city, 1.916 mills from the county and 3.5 mills from the school district.
Combined, the property tax increase will cost the owner of a $175,000 home an additional $135 annually in property taxes. The City Commission also approved an increase in utility rates that will cost the average resident another $65 annually.
Wilbur said some of the feedback the alliance has gotten is that collectively, it’s just too much at once.
“People are tax weary and they are concerned that renewing these taxes would continue that burden,” Wilbur said.
Wilbur said if infrastructure, transit and affordable housing are truly important, they should be funded by other means. He said that is particularly true for core services such as infrastructure.
Infrastructure and sidewalks
The city’s capital improvement plan assumes renewal of the infrastructure sales tax, which would generate $63 million for projects over the 10-year period. The city plans to use the sales tax revenue for several high-dollar infrastructure projects and annual programs, such as the residential street maintenance program, improvements to 23rd Street and increased funding for some sidewalk, bicycle and pedestrian improvements.
Earlier this month, the City Commission voted unanimously to use the existing 2018-2022 capital improvement plan as the spending plan for the infrastructure sales tax renewal. The CIP lists 20 infrastructure projects or programs.
However, one community group is concerned with what that plan has left out.
The infrastructure sales tax ballot language, which is binding, does not specifically address the issue of residential sidewalk repair. Although the dollars could still be used on those repairs, Director of Public Works Chuck Soules previously told the Journal-World that is not currently the plan.
In January, the Lawrence Association of Neighborhoods, which includes representatives from about a dozen neighborhoods, voted to take an official stance on sidewalk repair funding.
The current city ordinance, which has not been fully enforced, requires property owners to pay to repair sidewalks that border their homes. That has resulted in millions of dollars of unattended cracked or broken sidewalks, and LAN said the city should help fund those repairs.
LAN has no official stance on the sales tax renewal, but LAN co-chair Courtney Shipley said members are disappointed that the renewal doesn’t set aside money for residential sidewalk repair.
“We have been on the record and long maintained that the city needs to come up with a funding source for sidewalks, and they have not addressed that problem,” Shipley said.
Shipley said LAN’s goal is to make sure voters understand that. The LSA gave a presentation to LAN at its last meeting, and Shipley said the next meeting will include a presentation from a city staff member and advocates for the affordable housing tax. She said the intent is purely informational.
“You vote however you vote, that’s fine,” Shipley said. “But we just want people to be aware and know what the issues are and know what the benefits are.”
Transit and affordable housing
If the transit sales tax is renewed, it is projected to generate about $4 million per year for transit operations, which enables the city to receive nearly that same amount annually from state and federal transportation grants. Bus fares only account for about 6 percent of transit’s revenue.
Instead of relying on sales tax revenue, Wilbur said the city could increase fares or request funding from the University of Kansas, which coordinates its routes with the citywide transit system. He also said the uncertainty regarding the transit hub — a second location analysis is in the works but won’t be done before the vote — is also problematic.
“We don’t know what the future of the hub is, and committing this kind of money right now just doesn’t seem to make sense,” Wilbur said.
If the affordable housing sales tax is approved, it is projected to generate about $1 million per year for the city’s affordable housing trust. More than three out of every 10 homes in the city are unaffordable, and supporters say that funding is needed to address what has become a widespread problem. The trust has helped fund a handful of housing projects in recent years, which some say are examples of how the money will be spent. The ballot language broadly outlines how the money can be spent.
But Wilbur said he doesn’t think that’s enough. He said some of the feedback he’s heard from people is that they want to see a specific spending plan, “a vision of how the sales tax is actually going to help increase the availability of affordable homes and apartments.”
Wilbur also said the affordable housing problem has multiple causes, including local wages and the economic effect of people who work in nearby cities but live in Lawrence.
“It’s much deeper than a pot of money that the city can spend at their discretion every year,” Wilbur said.
But the group thinks concerns about spending plans can be addressed.
A counter offer
Each of the three components of the sales tax are separate ballot items. If any of the components are voted down, the timing of the election allows for the city to hold a second and potentially a third election. City leaders have previously told the Journal-World that could allow them to modify the ballot questions.
Maples said he sees that structure as a chance for voters to negotiate.
“The city has put this out as their starting point, and really the only counter offer we have right now is a vote 'no,' so we come back and have more discussions about other ways to handle these issues,” Maples said. “If the vote comes back 'yes,' that’s it, done deal.”
For her part, Shipley said she thinks that structure gives the city another chance to set aside funding for residential sidewalk repair, should voters reject the infrastructure sales tax renewal the first time around.
“If that was the case, then I would suggest that those homeowners and taxpayers demand that they come up with a solution for the sidewalk problem and that that be addressed in that tax,” Shipley said.
Wilbur said the Lawrence Sunset Alliance has presented to neighborhood and community groups, and those presentations will likely continue. As the election nears, he said the group will be canvassing neighborhoods to hand out informational flyers and distribute yard signs.