Archive for Tuesday, February 13, 2018

Lawrence leaders propose using part of city sales tax collected on groceries to help the poor

Lawrence City Hall, 6 E. Sixth St., is pictured on May 3, 2016.

Lawrence City Hall, 6 E. Sixth St., is pictured on May 3, 2016.

February 13, 2018

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City leaders want to know how much money impoverished Lawrence residents are charged in sales tax on groceries, and whether the city can indirectly return some of that money.

Mayor Stuart Boley brought up the idea at the City Commission’s work session Tuesday, asking his fellow commissioners if they are interested in considering such a program.

“I’ve been working to figure out how much people in Lawrence who are in poverty pay to the city, to us, in sales tax on their groceries, with the idea that we might be able to turn some of that money back around to mitigate hunger in Lawrence,” Boley said.

Kansas is one of only 13 states in the U.S. that charge any sales tax on groceries, according to a 2016 report from the Tax Foundation. In Lawrence, residents pay at least 9.05 percent sales tax on purchases, including groceries, and in some areas of the city, sales tax on purchases can be more than 10 percent.

Boley’s idea is to have a program that would help address hunger for low-income families. Vice Mayor Lisa Larsen and Commissioner Jennifer Ananda both said they are interested in looking further into the idea.

Boley brought up the topic during the commission items portion of the work session. He recognized that the city collects a significant amount of revenue from sales tax charged on groceries, and said he would like at least a portion of the amount charged to impoverished residents to be spent on a program to fight hunger.

About 17 percent of people living in Douglas County are “food insecure,” meaning they have limited or uncertain access to adequate food, according to the Douglas County Community Health Assessment. That rate is worse for children, with 1 in 5 living in households that are food insecure.

Legislation affecting the state sales tax on groceries was recently introduced, and even though as proposed it would not affect the city, Boley said he thinks the commission should consider how changes might affect the city’s budget in the future.

Earlier this month, an amendment was proposed that would phase in reductions to the state sales tax on food. If approved, it would lower the state sales tax rate from the current 6.5 percent to 4 percent in 2019, then to 2 percent in 2020 and thereafter. As proposed, the amendment would not require cities and counties to lower their local sales tax rates.

The Kansas Legislature controls the state sales tax rate and what can be exempted from sales tax. Currently, local governments’ sales tax exemptions can’t deviate from those of the state.

Ananda asked whether the proposed legislation would provide local governments the option to reduce or eliminate their sales taxes on groceries. City Attorney Toni Wheeler told the commission that she will review the pending legislation and see if that is being discussed as a possibility, but that she doesn’t think it’s likely.

Whether the city’s sales tax revenue from groceries is reduced or diverted to a community program, it could significantly affect the city’s budget. In 2016, the city collected more than $5 million in revenue from local sales tax charged on groceries, according to sales tax reports. That figure represents about 13 percent of the city’s sales tax revenue and about 2.5 percent of the city’s overall revenue for the year.

City Manager Tom Markus said if any changes are made that affect how much revenue the city collects from sales tax, the commission would have to find another revenue source or make cuts.

“If you acknowledge that there probably isn’t a substitute revenue (source), the logical extension is that it would have to come from a cut in expense from something else,” Markus said.

Boley said he doesn’t currently have a suggestion of what to cut, but now is the time to start considering options. He noted that budget season is near.

In other business, the commission received a presentation from Lawrence Memorial Hospital regarding its plans to build a 200,000-square-foot medical facility on the northwestern edge of Lawrence. The outpatient facility will include a complex of doctors’ offices, outpatient surgery rooms, physical rehabilitation centers and other services and is expected to be complete in late 2019 or early 2020.

Comments

Deborah Snyder 1 week, 2 days ago

Mr. Boley and city commissioners: While I am relieved that you are not totally tone deaf to the reality of the massive city-wide damage being done to our most vulnerable, by imposing what should be an illegal, CRIMINAL regressive tax on our most basic human need; food... You do not get a pass by offering a bureaucratic sop to the very situation you helped create.

You do not get a "feel-good" slap on the back for Taking Away from All and then tossing a bone back to a selected few. The city's dependency on a Food Tax to function is inexcusable fiscal governance, and must stop, particularly in a city which claims itself to be "progressive."

Richard Heckler 1 week, 2 days ago

REDUCE THE SALES TAX ON GROCERIES.....

Doing anything thing else creates more bureaucracy which is ineffective.

Stacy Napier 1 week, 2 days ago

You hit the nail on the head. So you are keep the tax and then try to distribute it to a few who meet some criterion. So how much money is that going to cost to set up. Someone to process the checks or fill refunds? IDK how ever you do it, It' will me at least one employee or more. What an Idiot. All to just make himself look good.

Richard Heckler 1 week, 2 days ago

Reducing the sales tax on groceries allows taxpayers who can to spend that money elsewhere = sales tax money being spent elsewhere thus still generating sales tax dollars = no loss = yet still being sensible.

Ron Holzwarth 1 week, 2 days ago

While it is true that the money saved by not paying the city sales tax on food is very likely to be spent elsewhere here in town, claiming that there is no loss in tax revenue to the city is an exaggeration.

Assume that $10 is not paid in sales tax on food. Spent elsewhere, it would generate only a bit over $0.90 in sales taxes paid on other items besides food. There would be other taxes paid besides that, for instance, property tax paid to the county by the business establishment or the owner of the property. Furthermore, income tax to the state would also be paid by the employees of said business establishment. And Federal tax also, for that matter.

So, the claim that there would be no loss to the city is not true. But it is true that the reduction in tax revenue would not be as great as it might appear.

Steve Jacob 1 week, 1 day ago

Reducing taxs so you can spend money elsewhere, when did you become a Republican Richard :)

Sam Crow 1 week ago

I believe you described trickle down economics.

Steve Dieker 1 week, 2 days ago

Using a portion of the sales tax to help the less fortunate - Isn't that what you do with a portion of it now?

David Reynolds 1 week, 2 days ago

The simplest way to help the poor is to increase employment opportunities in Lawrence & Douglas County. The old adage: "Feed a person a fish today & they eat today. Teach the person to fish and they eat for a lifetime", holds true today & in this situation.

For too long the city of Lawrence has, thru it's actions, discouraged employment opportunities. Most recently telling companies we want them to locate in Rock Chalk Park, when that ran contrary their demographic requirements. Of course there is also the howling about corporate welfare. it's amazing how the city administration believes it is smarter than the companies making the investment. The city administration seems to forget, or ignore, the fact that through their decision employment opportunities are lost, which exacerbates the problems the city is trying to solve today.

If this "redistribution of grocery tax dollars" goes forward, how do we make up the lost revenue?

Why does Lawrence always take the most costly route for a solution to any problem?

As mentioned above, for years we have been losing employment opportunities, because of policies that disincentivized companies from coming to Lawrence & Douglas County.

The continued increase in property & sales taxes are the result of those policies.

To make up the lose in revenue, will the city reduce spending or continue to spend and raise taxes, making Lawrence more & more unaffordable, for the very poor they are trying to help?

Clark Coan 1 week, 2 days ago

Maybe give gift cards to Checkers to the very poor (those below the poverty line).

David Schneider 1 week, 1 day ago

Constant building of apartments is mainly what I see going on. Those aren’t well-paying local jobs.

Deborah Snyder 1 week, 1 day ago

Thank-you Mr. Bloss, Jr. and Mr. Heckler for clarifying my earlier post.

Mr. Holzwarth and Mr. Reynolds; your comments clearly demonstrate a complete disregard for the UNABRIDGED Human Right to food, purchased by people who paid. their. employment. taxes: who. work. TWO or more jobs... whether married, or single, with or without young mouths to feed: or by those unfortunates on any taxpaid. public. assistance like CHIP (do you even get the dispicable tax-on-tax irony of that?)

I am a 10-year veteran of Viet Nam, yet have been penniless and hungry... with a baby and nowhere to live. I have gone without food because my child needed diapers. To tax groceries is a cynical, morally bankrupt toll on the most vulnerable, the most financially fragile population, and by extrapolation, on. our. city's. poverty-stricken children.

By your comments, I don't believe either one of you will lose any sleep over their deprivation because of a ten percent toll on every loaf of bread or gallon of milk sold in Lawrence, Kansas.

David Holroyd 1 week, 1 day ago

Boley wants to give away money to "some" but not to all. He must belong to the Robin Hood band,,and the Sheriff of Nottingham is no where to be found.

Clark,,,there would be a lot of gift cards to Checkers. And why do you propose Checkers? Why not Aldi,,,and THE MERC...they are so community minded. In fact,they could just eat the sales tax if the "poor" shopped there.

EBT cards have no tax charged for food,,,so what the heck is Boley talking about. What is poor? Please explain.

Sharilyn Wells 1 week, 1 day ago

why tax people and make them run around and beg for help somewhere? not dignified.

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