Archive for Wednesday, August 26, 2015

Bonner set to ask for continuation of sales tax in spring mail ballot election

August 26, 2015

The Bonner Springs City Council Monday decided it would like to ask voters to maintain the city’s sales tax rate beyond 2016, when it otherwise would see a slight reduction.

With the state soon to require cities to hold an election in order to increase property taxes, plus a likely sales tax revenue reduction due to a major business moving to Kansas City, Kan., the council reached a consensus of support to ask voters via mail-in ballot next spring to renew a sales tax formerly used to fund construction of the Bonner Springs City Library. The library tax will expire at the end of 2016, but the council will ask voters to continue the tax indefinitely for general fund purposes.

The council won’t officially vote to have the mail-in election until later this year, but the issue was one that City Manager John “Jack” Helin wanted the council to decide before his retirement next month.

The 10-year, quarter-cent sales tax was approved by voters in 2006 and is expected to raise about $467,500 each year if continued. The tax also would not have a sunset.

“Once it’s in, it’s in,” Helin said. “Obviously, future councils can say, ‘Let’s get rid of it.’ But it wouldn’t be a sunset item.”

Currently, the city charges a 1-cent sales tax for the general fund and has three 10-year, quarter-cent sales taxes: the library tax, the emergency services tax and the capital improvements tax, which was formerly a tax used to fund the Bonner Springs Aquatic Center. Voters approved transitioning the tax from funding the aquatics center to funding capital improvements like road construction in a 2013 mail ballot election.

Helin noted that maintaining the tax as a revenue source could be important for the city because in the future, it will be harder to raise property taxes. Legislation was approved last year that caps the ability of cities and counties to raise property taxes without a vote of the public effective 2018. But the cities generally don’t complete their budgets for the next year until August, at which point it is too late to get something on a November ballot if a tax increase is need.

“One of the key things for me is what the Legislature has already done to us,” Helin said.

He noted that Johnson County increased its property tax rate for the first time in years by 14 percent, partially in anticipation of the Legislature moving the date for a required vote up to 2017.

Another consideration was the loss of revenue from Victory Ford, which will move its dealership to Kansas City, Kan., sometime next year. That move “will have a significant negative impact on our revenue flow for the general fund,” Helin said.

Helin said he thought it was the right decision for Bonner to maintain its property tax rates in its 2016 budget, because prolonging the sales tax for general fund use would bring in revenues from everyone who shops in Bonner Springs rather than placing the burden entirely on property owners.

The council agreed to put the item on the ballot, and while it would be free to add the issue to the November 2016 ballot, the tax wouldn’t be enforced until the second quarter of 2017. Despite a $10,500 cost, the council unanimously supported a mail ballot election in the spring so the tax could continue as soon as it expires.

In other business, the council also conducted a 30-minute executive session for non-elected personnel matters. Helin said the council was reviewing the interviews conducted Aug. 20 with the four top candidates for his position.

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