photo by: Shawn Valverde

The Lawrence Community Shelter, 3655 E. 25th St., is pictured on Thursday, Nov. 9, 2023.

A Lawrence nonprofit formed by a group of downtown business leaders urges residents to vote “no” on the referendum question asking for an increase in the city’s affordable housing sales tax that would help fund services to help people experiencing homelessness.

The group Lawrence Cares, which was formed in February to focus on addressing homelessness issues, wrote in a letter Friday that it has “reservations” about approving a sales tax increase and urged people to vote “no” on that referendum.

“Until the City can establish trust that funds will be well spent, we believe that a NO vote is the better option,” the statement said.

The ballot initiative was approved by the City Commission in August as part of the budget discussions for 2025, as the Journal-World reported. The sales tax increase would add an extra nickel in tax to every $100 in purchases made by consumers in Lawrence. State law requires that all city sales tax increases be put to a citywide vote.

Currently, the city has a 0.05% affordable housing sales tax that voters approved back in 2017 that helps fund programs related to affordable housing.

If the referendum is approved, it would repeal the current 0.05% affordable housing sales tax that the city collects, and instead make it 0.10%, with the revenue equally divided between projects for affordable housing and homelessness services. The collection of that 0.10% tax would start on April 1, 2025. If the referendum is voted down, the current tax that funds housing projects would be left in place.

Cori Wallace, a spokesperson for the city, said a yes vote would mean continued funding for The Village Pallet shelter community, continued capacity for shelter that is not just night-by-night and continuation of outreach services like addressing mental health needs, addiction needs or immediate needs like food or water.

In its letter, Lawrence Cares said it does not support the sales tax increase because of concerns about a lack of transparency for the funding and a need for more efficiency in addressing the issue.

The nonprofit said the city has not provided details about the specific programs that would be funded or implemented with an increase in funds. The group also believes the city should focus on creating a “Hub of Hope” — a place where homelessness services are concentrated in one location. The group said it feels that increasing the tax would be more inefficient as the city would likely spread its funds to competing nonprofits.

The nonprofit also encouraged residents to direct donations to organizations such as the Lawrence Community Shelter instead of voting to approve the referendum.

City staff previously told the Lawrence Journal-World that the Homeless Solutions Division would have a $1.25 million shortfall when it comes to emergency sheltering services if the measure doesn’t pass.

City Manager Craig Owens said in a statement if the ballot measure failed, the city would likely lead to a reduction in shelter capacity below what the city needs. The city would then need to reduce services in other areas of the city budget to maintain its current service level and progress on “A Place for Everyone,” a combined effort from Lawrence and Douglas County with the aim of ending homelessness that called for $267 million in estimated spending in the next five years. Owens said the city could consider other options to raise revenue, which could affect property taxes.

Voters will decide the issue as part of the Nov. 5 general election. Advance voting began on Oct. 16.