Sales Tax to Protect and Improve the Community

Fire Department

Infrastructure

Police Department

KCK citizens will vote April 13 on a 3/8-cent increase in the KCK sales tax. The new revenue raised by the tax would pay for public safety services and community infrastructure projects, including street repairs and curbs and sidewalks in neighborhoods. The dedicated sales tax would sunset in 10 years unless voters renew it. 

The Public Safety and Community Infrastructure sales tax proposal is expected to raise $6-million a year. The new revenue will be used to:

• help protect the KCK Police Department and KCK Fire Department from further budget cuts
• generate new funds to pay for resurfacing projects, street repairs and neighborhood improvements, such as curbs and sidewalks.

The current sales tax in most of KCK is 7.55%. Approval of the 3/8-cent sales tax increase will make the sales tax rate 7.925% in most of KCK, or 7.9-cents for each $1 spent. If approved, the sales tax paid on a $100 purchase will increase 38-cents over what is now paid. (How Much Will I Spend?)

Some shopping areas in KCK have additional taxes, ranging from 1/10th of a cent to one penny. For example, some stores at Village West have a 7.6% sales tax rate, while others have a sales tax totaling 8.1%. At Prescott Plaza and Plaza at the Speedway the rate is 8.5%. Figures from the Kansas and Missouri Departments of Revenue show the KCK sales tax rate will remain competitive with surrounding communities. Many cities including Mission, Lenexa, Leawood, Overland Park, Lee's Summit, Independence and Kansas City, Missouri have sales tax rates over 8%. Some shopping areas, such as Zona Rosa and one in Leawood have sales tax rates over 9%. And KCMO adds an extra 2% tax on restaurant and bar tabs.

The Public Safety and Community Infrastructure Sales Tax is being proposed because of the heavy toll the economic recession is taking on the revenues which pay for Unified Government services. The national collapse of the housing market caused an increase in foreclosures, a decrease in home sales and a severe decline in property tax revenues. Rising unemployment and slower consumer spending created  a drastic drop in sales tax collections. And the Kansas Legislature, facing it’s own budget crisis, slashed millions in funding promised to the Unified Government. 

Elimination of the Machinery and Equipment Tax is costing the Unified Government $5.6-million annually in lost revenues.  The drop in assessed values on residential and commercial properties has reduced property tax revenues by $8.1-million. And sales tax revenues slipped by $2.2-million.

The 2010 Unified Government Budget contained millions of dollars in cuts:

• Most UG employees are under a two year pay freeze and are forced to take 15 days of unpaid furlough, which amounts to a 4.5% pay cut.
• Most union employees agreed to waive promised pay increases.
• The UG workforce has been reduced by 15%, totaling more than 300 employees.
• All departments are operating under at least a 10% reduction in their budgets.
• In the last two years, Unified Government spending has been reduced by $10-million. 

Despite the drastic drop in revenues, the Unified Government Commission decided to not raise property taxes. In fact, the Unified Government portion of the property tax bill has been reduced 26% since 1997. Wyandotte County residents continue to have a lower city/county tax rate than homeowners in Topeka, Leavenworth and several other communities. 

Holding the line on property tax rates may not continue if the sales tax proposal fails. Without the additional revenue, budgets will be cut deeper, including the KCK Police and Fire Departments. Street repairs and neighborhood improvements, such as curbs and sidewalk projects, will continue to be suspended. The Unified Government Commission will be forced to consider increasing the property tax rate to help ease the severe, on-going budget shortfalls confronting the community. 

The additional revenues raised by the sales tax will strengthen the Unified Government's financial condition and help protect against deeper cuts to important programs and services. With new revenue going to support public safety and community infrastructure improvements, the pressure on other funds will be lessened, improving the chances against deeper budget reductions in other departments. 

Passage of the sales tax referendum will also better ensure the Payment in Lieu of Taxes (PILOT) fee on BPU electric and water services continues to be reduced. the fee is already set to go down in 2011 and 2012, dropping .09% next year and an additional 2% in 2012, for a total reduction of almost 3% over the next two years.