In Salina, voters will decide by mail ballot whether to increase the city’s sales tax, an issue forced on that community by the malignant economic policies of a negligent governor and his clueless Republican allies.
The issue is whether Salina’s special sales tax should be nearly doubled, from 0.4 percent to 0.75 percent. The proposed additional tax is estimated to raise $9.35 million a year for 20 years; a third of it, $3.6 million, has been pledged toward maintenance and repair of neighborhood (non-arterial) streets, more than double the city’s current allocation. Added funds are needed for upkeep at city parks, aid to the city’s capital improvements fund, neighborhood rehabilitation, and cleaning the Smoky Hill River channel.
Balloting has begun by mail and if voters approve, the total Salina sales tax will increase from 8.4 percent to 8.75 percent.
Although this election is a local matter, it carries sweeping significance. Scores of other cities, counties and school districts have, or soon will, confront the issue of raising local taxes because the state has failed to manage its own budget and ignored its legal obligation to share revenue with local government.
FOR DECADES, the state by law had transferred money to cities and counties for local property tax reduction, among other needs. That transfer is gone. So are funds for city-county revenue sharing, a machinery and equipment tax, and state motor fuels tax allocations. These “demand transfers” from Topeka were written into law to stabilize the effect of state-ordered mandates, including the local collection and processing of state taxes.
That collaborative effort, to collect and share revenues, once ensured a principle that without strong cities, counties and schools, we cannot have a strong state. That effort has been sidetracked. Gov. Sam Brownback has insisted that state income taxes be abolished for certain businesses and high-bracket incomes; this has wrecked the government’s funding mechanism and created state budget defi cits of hundreds of millions of dollars. To cover these losses, state agencies ‒ starting with the highway and welfare departments ‒ have been robbed of their funding, their functions or both. (The state’s Medicaid program, for example, has been “privatized,” with its management auctioned to the high bidders in campaign donations.)
As a result, there is no revenue to share. Cities, counties and schools are left to spin in futility, and to raise local taxes to cover state negligence.
Fearing local backlash and blame for local tax increases in an election year, legislators put a lid on property levies, leaving locals with only the sales tax, which hits hardest those who can least afford it.
IN MOST communities the sales tax is a composite of state, county and local levies. The tax in Lindsborg carries a history familiar in many other communities, with differences only in the digits.
Lindsborg’s 9.5 percent sales tax includes the state’s 6.5 percent tax, a 1.5 percent McPherson County tax and a 1.5 percent Lindsborg tax. In Salina, it includes the state’s 6.5 percent and one percent county tax, a 0.5 percent city sales tax and the current 0.4 percent special sales tax.
Lindsborg last changed its sales tax six years ago, in April 2010, when voters approved a plan to increase the city’s one percent tax to 1.5 percent. The added revenues were to aid the community hospital and to fi nance property tax relief, economic development, and infrastructure maintenance, repair and improvements ‒ all of it funding that, in other times, had been matters of signifi cant state aid.
At the time, the state sales tax was 5.3 percent and the county’s, one percent; the local increase brought the Lindsborg tax to 7.8 percent.
A new governor, and newer legislature, have ended all that. Hoarding state revenues and cutting taxes for the rich became the Republicans’ passion. Local entities were left to raise local taxes. The McPherson County sales tax increased to 1.5 percent and the legislature raised the state tax by a penny, to 6.3 percent.
The state tax had been scheduled to drop to 5.7 percent in 2013 but lawmakers, intent on abolishing income taxes, increased it to 6.13 percent. In July 2015, the state sales tax increased again, to 6.5 percent.
Each time the state increased its tax, thousands of businesses in more than 270 Kansas taxing entities were forced to rejigger their cash registers, to apply the tax accurately. (In Johnson County alone, more than 55 entities levy a sales tax, which varies from 7.725 percent in Lake Quivira to 11.225 percent, the state’s highest levy, at the Overland Park Conference Center Hotel.)
So Salina is not alone in confronting this ragged, time-worn issue. As long as the governor and his legislators believe in tax cuts for some and budget deficits for the rest, the sales tax will be an issue to confound all communities ‒ rich, poor and inbetween.