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Pros and cons of the Kansas City, Kansas sales tax

On April 13, 2010, Kansas City, Kansas residents, including those living in Argentine, will vote on whether or not to increase the Wyandotte County sales tax by 3/8 of a cent. While this may not seem significant at first blush, consider the facts:

The Kansas legislature is currently on spring recess. In an unprecedented move, the legislature went on recess without first balancing the budget. Overall, the State of Kansas will face over an estimated $400 million budget shortfall for this year. The budget will be balanced when the legislature returns for the final two weeks of session at the end of this month. So far, members of both parties are proposing state-wide tax increases in addition to spending cuts.

The state-wide budget problems are not the only thing the legislature has been discussing. Last decade, the state issued what are called "STAR Bonds," (Sales Tax Revenue Bonds) which are essentially loans granted by the state to fund construction projects. One of the largest benefactors thus far of the STAR Bonds has been Wyandotte County's Legends entertainment district. Because of the STAR Bonds, sales taxes are higher in the Legends than they are at other retail areas in Kansas City, Kansas. When the new Wizards Sports and Cerner office complexes were approved under the STAR Bond project this past January, state Sen. Brownlee says that the $40 million a year in sales tax revenue the bonds would have brought in have been diverted to pay for the new projects. These bonds were supposed to be paid off in 2014, but now are projected to further distress state budget coffers.

This brings us to the upcoming sales tax vote that will affect Wyandotte County. The County argues that the tax increase is necessary because current employees are forced to take 15 day unpaid vacations and forgo pay increases for the next two years. However, the County admits that the tax increase may not solve these problems. Additionally, the $6 million in additional revenue from the increases is stated to help repair roads as well as protect the police and fire departments by putting an end to further budget cuts in those departments. $2.25 million of the projected $6 million in revenue will go towards paying off STAR Bonds in the Legends area.

If the new tax increase is passed, it will raise $0.079 cents on each dollar spent, and will cost $0.38 cents per each $100 spent. The County blames budget problems on the numerous foreclosures in the area, which have reduced property tax revenues, as well as reduced sales tax revenues, due to unemployment and decreased consumer spending. Proponents of the measure state that raising the sales tax provides a better option than increasing property taxes.

Armed with the big picture, citizens are encouraged to vote their conscience in the upcoming election on Tuesday, April 13, 2010 at the Wyandotte County Elections Office, 850 State Avenue Kansas City, Kansas 66101, or to call the Office at (913) 573-8500 for election information. Additionally, a Sales Tax Forum will be held on Monday, April 12, 2010 at the Sumner Academy. Stay tuned for more information on this Forum as speakers and times are solidified.

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