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Each person has to determine for themselves the level of taxes they wish to pay for the community they wish to have. We agree there is no such thing as a perfect tax. A sales tax is based on spending rather than owning. A small increment can go a long way and it allows people from outside of our town to help pay for key community needs. Based on the City’s retail market strength, approximately one-third (1/3rd) of our sales taxes are generated by those from outside of our community! Events such as Renaissance Festival, Tiblow Days, and concerts at Azura Amphitheater bring many people in to our city that make purchases. In doing do, these sales tax dollars lower the cost burden to property owners by spreading the cost of vital city services over a larger customer base instead of relying solely on property tax dollars from property owners in the City.
Source: City Trade Pull Factors – 2021, Kansas Dept. of Revenue Office of Policy and Research https://ksrevenue.gov/pdf/citypullfactorfy21.pdf
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This November, Bonner Springs voters will be asked whether or not to renew two, quarter-cent sales tax initiatives for ten-year periods.
One ¼ cent sales tax is to fund acquisition and maintenance of capital improvements and operational expenses for emergency medical services and public safety. These capital and operational expenses are ambulances, police vehicles, fire trucks, body cameras, record management, in-car video systems, radios, and other similar expenses for police, fire, and emergency medical services.
Here is the actual ballot language you will see in November for this sales tax renewal:
"Shall a City Retailers' Sales Tax in the amount of one-quarter of one percent (.25%) be levied in the City of Bonner Springs, Kansas, pursuant to the authority granted in KSA 12-187. Such Sales Tax is a renewal of the sales tax that is now part of the one and three-fourths percent (1. 75%) retailers' sales tax currently levied by the City, with such tax to be used for the purpose of financing operations and maintaining capital improvements for public safety and emergency services, to include payments of lease obligations, and principal and interest payments on such temporary notes and general obligation bonds necessary to finance them, such levy of tax to remain in effect for a period of ten (10) years with collection to begin on October 1, 2023 upon expiration of the current tax. Yes or No."
The other ¼ cent sales tax is to fund general capital improvements. These capital improvements include street maintenance and repair, parks, trails, sidewalks, and other similar projects.
"Shall a City Special Purpose Retailers' Sales Tax in the amount of one-quarter of one percent (.25%) be levied in the City of Bonner Springs, Kansas, pursuant to the authority granted in KSA 12-187. Such sales tax is a renewal of the portion of the total sales tax of one and three-fourths percent (1.75%) retailers' sales tax currently levied by the City, with such tax to be used for general capital improvement needs of the City to include, but not limited to, payments of lease obligations, and principal and interest payments on such temporary notes and general obligation bonds necessary to finance them, such levy of tax to remain in effect for a period of ten (10) years with collection to begin on January I, 2024 upon expiration of the current tax. Yes or No."
No! This is a renewal of two ¼ cent sales taxes already in place. The current sales tax rate in Bonner Springs (Wyandotte County) is 9.25%. If both sales taxes are renewed by voters, the rate will remain the same.
If these sales taxes are not passed by the voters, the city would lose approximately $1,240,000 annually to pay for street maintenance, and emergency services such as fire, police, and emergency medical. The city would either need to drastically cut services or increase property taxes to continue to fund these services in the future. The equivalent in property taxes would be 12 mills, or $276 in property taxes annually on a $200,000 home.
Each ¼ percent sales tax generates approximately $620,000 annually for a total of $1,240,000.
On a $100 shopping bill, these two sales taxes would cost you 50¢. For a $10 fast food purchase, it’s just 5¢, or just 3 pennies on a $6 latte. For an average family of four, that's approximately $105 annually on groceries. A pretty low rate to ensure your streets are maintained and you have quality fire, police, and emergency medical services. These are sales tax renewals which means they are currently in effect now and there will be no additional impact on your wallet if these sales taxes are approved by voters.
In comparison, the equivalent amount in property taxes would be 12 mills, or $276 in property taxes annually on a $200,000 home.
A sales tax spreads the cost of services across a larger customer base, lowering the individual's cost for service and keeping property taxes low.
Source: Consumer Expenditures Survey - 2021, Bureau of Labor Statistics https://www.bls.gov/news.release/cesan.nr0.htm
Sales tax rates vary by city and county due to the tax rates in each jurisdiction. Special taxing districts are used throughout the State to generate revenue to finance expenses associated with development. Some nearby retail destinations with special district sales taxes include Village West in Kansas City, Kansas, and Oak Park Mall in Overland Park. The Department of Revenue maintains an up-to-date list of all special taxing districts in Kansas at https://www.kssst.kdor.ks.gov/lookup.cfm.
In Bonner Springs, there is one community improvement district (CID) which adds an additional sales tax to the base sales tax for the purpose of generating revenue to finance expenses associated with the development. In these special districts, the developer fronts the funds to pay for the improvements and is reimbursed over time as CID revenue is generated. The City is not obligated to reimburse these expenses unless the revenue is generated.
Source: Local Sales Tax Information, Kansas Department of Revenue https://www.ksrevenue.gov/salesratechanges.html
For the public safety sales tax, the City has used the sales tax proceeds to purchase police vehicles, fire trucks, ambulances, body cameras, a records management system, in-car video systems, radios, and other similar equipment and operational costs for the police, fire, and emergency services departments.
For the capital improvement sales tax, the City has used the sales tax proceeds to fund park projects, trails, sidewalks, road maintenance, reconstruction, and resurfacing, and other similar projects.
The ballot questions limit the use of the tax to the items mentioned in a previous question. Should these sales tax initiatives not be renewed by the voters, the City would need to consider a reduction in services or an increase to property taxes.
We continue to hear our residents ask for neighborhood street improvements more than anything else. The City has used over $5 million of these sales tax proceeds just for neighborhood street maintenance, reconstruction, and repairs. Other needs we intend to address include sidewalks, trails, equipment, and parks.
Another essential need one of these sales taxes address is emergency services. This sales tax funds vital emergency services such as police, fire, and emergency medical at a rate of approximately $620,000 per year.
First, the ballot language legally limits the use of funds to what is specified. That keeps the dollars from being used for other things. The City made these commitments for the use of these sales tax funds during the last initiative in 2013 and has followed these commitments very closely.
We are very sensitive to concerns that any increase in sales tax could impact retail business activity. However, these are sales tax renewals which means the current sales tax rate will not change and will not negatively affect our businesses.
In 2017, the City teamed up with Infrastructure Management Services (IMS) to conduct a state-of-the-art street pavement analysis in an effort to utilize data to increase accuracy and efficiency in completing the pavement condition survey. IMS documented pavement fatigue, rutting, cracking, potholes, roughness, joint spalling, and more, to analyze the condition of the surface of roads, identify maintenance and rehabilitation needs, and ensure that road maintenance budgets are spent efficiently and equitably. This technology allowed the City to utilize a more thorough, comprehensive, and proactive approach to review the entire road network called a Pavement Condition Index (PCI). The City prioritizes street projects based on this data, changes in roadway conditions, and the level of funding available each year.
Based on the Pavement Condition Index (PCI) completed by Infrastructure Management Services in 2017, it would have cost the City $16.8 million to fully fund all street maintenance and improvements needed at that time. That would equate to $20.3 million in today’s dollars*. This calculation doesn’t factor in the cost of deferred maintenance from continued deterioration of street conditions due to not being able to fund all improvements at one time. It also only factored in current roadway miles and did not include needs such as street extensions or widening. Because the City cannot fund all improvements at one time, street projects are prioritized based on data from the PCI, changes in roadway conditions, and the level of funding available each year.
*CPI Inflation Calculator, Bureau of Labor Statistics
We use these sales tax proceeds to fund millions of dollars in street maintenance and repairs. Improvements to 138th Street from Kump (K-32) to Morse are currently in progress. These improvements will widen 138th Street and add sidewalks along this stretch of road. The City is in the process of acquiring the necessary right-of-way and easements to complete the project. Construction is anticipated to start in 2024.
The City also submitted a grant request for funding to reconstruct Metropolitan from Nettleton to the county line at 142nd Street. If funding is awarded, plans to improve Metropolitan would include sidewalks and widening the roadway.
These sales tax funds are used for other purposes described in a previous question. Using other funding methods, the City is currently in the process of building a new water treatment plant which will feature water softening and higher capacity volume. Final design and permitting will take place in 2022 with construction scheduled to begin in 2023 and an anticipated completion date of late 2024. The cost for the project is $29,187,812, and the City has applied for grants, American Rescue Plan Act (ARPA) funding, and will continue to pursue future additional funding opportunities. Building a new water plant is less costly than purchasing water from another water utility or funding continued emergency breaks and repairs.
The City is focused on accountability and transparency. This is why the sales tax ballot language lists specific categories for how the funds can be used. These categories have legal limitations. From a budgeting and accounting perspective, the sales tax funds are separated from our General Fund and all other accounts so there is never confusion or concern about the use of funds. The annual allocation of funds for projects are approved by the governing body during a series of open meetings intended to address our annual budget and capital improvement planning. This allows for full transparency and the public’s eye on the use of funds. Finally, these special funds are included in the City’s annual financial statements, which are audited annually. The audit is always conducted by a third-party auditing firm. For many years, the City has consistently received the highest audit opinion noting that the City has strong financial practices protecting against fraud and misuse and that the City’s financial statements are free from material misstatements which could arise from fraud or error. You can review the City's past several years of audits here.