This is the season when various units of local government are preparing budgets for the coming year. I plan to visit all of these municipal, school and drainage districts, telling elected officials to hold the line on property taxes.
This is something that I have done for the past several years as executive director of Business West. It isn’t that Business West is anti-government or anti-school. On the contrary, Business West believes that quality schools and good local government services are a very important element of community growth.
But taxes have to be more reasonable; the present tax rates in Wyandotte County are about 20 percent higher when compared to neighboring cities in Platte, Leavenworth or Johnson counties.
There has been substantial growth in the Village West area; however, most of that has been because of substantial tax breaks; the Kansas Speedway and the Legends are benefitting from sales tax money that would normally go to the state and local coffers. Instead that money goes to pay off bonds that have financed infrastructure such as Village West sewers and streets.
In addition to the benefit of sales tax bonds, the Kansas Speedway received a 30-year tax abatement; presently the speedway’s real property is valued at $22,687,990. I once estimated that if the speedway were on the real estate tax rolls, it could generate more than $70 million during its abatement period.
The argument for all this tax abatement is that once the sales tax bonds are paid off, Wyandotte County will benefit from substantial sales tax revenue. The Village West bonds should be paid off by late 2016; estimates are that will mean about $15 million annually in sales tax revenue. This new revenue source must be used to reduce property taxes.
One encouraging fact that the bean counters down at City Hall have not mentioned publicly is the relative increase in sales tax collections in Wyandotte County. The Kansas Department of Revenue does an annual survey of all Kansas counties and cities, ranking them by their retail sales “pull factors.” I don’t know all the details of this survey—however, a city or county that has a pull factor of 1.0 or greater has adequate retail sales, based on its population.
For many years, Wyandotte County suffered from lack of sales tax revenue. Based on this survey, Wyandotte County had a pull factor of only .63 in 2005. In more recent years, sales tax revenue has improved as the Wyandotte County pull factor in 2012 was .88. And that number does not include revenue from Village West as those funds go to pay off sales tax bonds.
That improvement in retail sales and the substantial increase that will come when the Village West sales tax bonds are paid off must mean tax relief for the homeowner and the small business owner. In the meantime, elected officials need to hold the line as they prepare their budgets.
Murrel Bland is the former editor of The Wyandotte West and The Piper Press. He is the executive director of Business West.