A look at how high Lawrence’s sales tax rate would be if voters approve increase for jail, mental health

photo by: Mike Yoder

Douglas County Jail

The questions are beginning to pile up on Douglas County’s effort to win voter approval for a sales tax increase for more than $50 million of jail and mental health projects.

Perhaps near the top of that list is this question: Does Lawrence want to have the second highest sales tax rate of any major city in Kansas?

I crunched the numbers recently, and if voters approve a half-cent sales tax increase for jail and mental health projects, Lawrence would have the second highest citywide sales tax rate of any large city in the state, depending on how you categorize large.

Lawrence currently has a citywide sales tax rate of 9.05 percent. The number that Douglas County commissioners are now considering for the jail/mental health projects is a 0.5 percent sales tax. That would take Lawrence’s rate to 9.55 percent.

Based on the current sales tax rates released by the state on Jan. 1, only 10 cities in Kansas have a citywide rate higher than 9.55 percent. The largest is Shawnee in Johnson County, with about 65,000 people and a sales tax rate of 9.6 percent. The average population of the other towns was about 6,000 people. The only other city approaching large status is Junction City, a 24,000-population community that has faced a lot of financial distress in recent years.

To be clear, there are several dozen “special taxing districts” that have rates higher than 9.55 percent. Those are things like hotels, travel plazas, destination shopping centers and such. For instance, when you shop in the Village West stores near the Kansas Speedway, you’ll pay 10.325 percent in sales taxes. (There is a theory why those stores are located next to a racetrack. Anybody who charges you that much in sales tax needs quick access to a fast getaway car.)

Lawrence has three of those special taxing districts: one at Ninth and New Hampshire that includes the Marriott hotel and the multistory apartment, office and retail building on the northeast corner of the intersection; The Oread hotel near the University of Kansas campus; and the Bauer Farm retail project near Sixth and Wakarusa. If a half-cent sales tax increase is approved, those three special taxing districts will charge 10.55 percent in sales taxes. Yes, they will charge a higher rate than the retail center near the Kansas Speedway.

Lawrence is among a handful of cities in the state that have worked to become a retail center. Here’s how a Lawrence rate of 9.55 percent would stack up against these other traditional retail communities:

• Dodge City: 8.65 percent

• Garden City: 8.65 percent

• Great Bend: 8.25 percent

• Hays: 8.75 percent

• Hutchinson: 9.1 percent

• Lenexa: 9.35 percent

• Manhattan: 8.95 percent

• Olathe: 9.475 percent

• Overland Park: 9.1 percent

• Salina: 8.75 percent

• Topeka: 9.15 percent

• Wichita: 7.5 percent

Of course, there are other considerations with this issue besides our sales tax rate. The jail is overcrowded at the moment, and concerns are that we don’t do enough as a community to provide mental health care. Do those concerns outweigh the concerns of having a sales tax rate that is near the top in the entire state? That is not for me to say. But it is important to point it out and the questions that come with it. If Douglas County residents do decide a tax increase is in order, we may want to ask: What is it about Douglas County that requires us to have one of the highest sales tax rates in the state in order to meet our needs?

Some other interesting questions are emerging on this jail/mental health tax issue, which, by the way, county commissioners have not yet formally put on the ballot. It looks like January will be a key month for the issue. County commissioners are scheduled to get some new cost estimates next week and may vote by the end of the month to put a sales tax question on a future ballot.

Here’s a look at a couple of other questions:

How should voters be allowed to vote for this tax increase? We reported earlier this week that county leaders now believe it is not possible to put two separate tax issues on the ballot: one tax increase for the jail expansion project and another tax increase for the mental health projects. There are certainly people who want to vote for one or the other. But the county says it can’t do that because the specially approved state law giving Douglas County the authority to put a sales tax question on the ballot only allows for one half-cent sales tax question.

But almost immediately the question became: Couldn’t the Legislature just change the wording of the Douglas County ballot bill it approved in 2015? Presumably, legislators don’t care whether Douglas County splits its half-cent sales tax increase into two 0.25 percent questions or any other combination thereof.

Douglas County Commission Chairman Mike Gaughan, however, showed no inclination to ask legislators to do that. He said such a process would take time. Certainly, Kansas legislators are not known for being quick workers. But, at first glance, it looks like they would have plenty of time to do this.

If Douglas County wants to put the sales tax question on the November general election ballot — that is the one where the governor’s race will be hotly contested — they need to have the ballot question issue resolved by Sept. 1, County Clerk Jamie Shew told me. The Legislature starts next week. While lawmakers have been slow in the past, the session has never even come close to going into September. Last year the regular session ended in April.

When should voters be allowed to vote for this tax increase? I believe some people are assuming that the county will put the sales tax question on one of the two elections already scheduled for 2018: the August primary or the November general election. Otherwise the county will have to pay for a special election. Regardless, I think it is possible the county may choose to go with a special election in the spring, just like the Lawrence school district did with its bond election last May. That was a mail-in ballot. County Clerk Shew confirmed to me that the county could use a mail-in ballot for a sales tax election.

But it is worth asking why the county wouldn’t put the sales tax question on the November ballot? If you want to have high voter turnout determine this sales tax question, then the November 2018 general election seems like a gift. Turnout is going to be very high as a race potentially involving Kris Kobach for governor will create a lot of interest, and Lawrence resident Paul Davis likely will be competing for a spot in Congress.

People have been impressed with the voter turnout produced by mail-in ballots in Douglas County, but the numbers strongly suggest a mail-in ballot in May, for example, won’t produce near the turnout that the November general election will. The May 2017 mail-in ballot for the school bond produced a 35 percent turnout rate. The November 2014 general election — the last time the governor’s race was on a ballot — produced a 50 percent turnout. I asked Shew if a mail-in ballot had any chance of producing a turnout equal to or greater than November’s general election.

“Probably not,” he said.

Maybe the county thinks it has to get voter approval as soon as possible because the overcrowding at the jail is that dire. It may still have more of a case to make on that front. And, then, voters will have to decide whether the desire for expediency outweighs the greater cost of a special election and the likely lower turnout it would produce.

As I said, the questions are plentiful.