Sunday, January 11, 2009
Half Cent Sales Tax Increase Proposed
The Raytown Board of Aldermen is expected to approve the placement of a half cent sales tax on the April 7th ballot. If approved, the sales tax in Raytown will be increased to close to nine percent. Making Raytown one of the highest taxed cities in the metropolitan area. Discussion at last Tuesday’s Board of Aldermen centered on questions of how the sales tax could be used. According to City Attorney Nancy Thompson, sales tax revenue from the new sales tax would be dedicated to public safety expenditures. However, it was also pointed out that money from the sales tax could also be used to pay for regular budgetary items -- provided the are public safety in nature. This shifting of funds would free up money for other needs in Raytown. The ability of the City to shift budgetary figures to free up dedicated sales tax revenue is not new. Raytown taxpayers approved a transportation sales tax about ten years ago. Voters were promised the sales tax would be used exclusively for transportation purposes such as street repair, ATA bus service, etc. However, that portion of the city’s Transportation Sales Tax that comes from sales at the new Walmart (once it opens) will not go towards repairing streets. Instead it will be used to pay off the debt created when the TIF bonds were sold to underwrite the Walmart project. This is no small amount of money. Up to 18% of the city sales tax is anticipated to come from sales at the new Walmart. In other words, the money will not be used to repair streets, sidewalks or pay for bus service. What it Means . . . It means that promises made for this sales tax increase are as binding as those that were made for the Transportation Sales Tax. Is Now the Best Time to Increase Sales Taxes? Another detail that came out in last Tuesday’s discussion is that if the voters reject the sales tax increase, the city would be prohibited from bringing it back for consideration for a full year. What is interesting is what was not discussed. As everyone reading this page is well aware, the country is deep in an economic crisis that is the worse since the stock market crash in 1929. High unemployment figures, uncertainty in the financial markets and the unknown effectiveness of a yet to be announced stimulus packages out of our nation’s capital suggest this may not be the best time to ask taxpayers to reach deeper into their pockets. Sales taxes increases have not fared well at the polls lately. In fact, Kansas City voters recently rejected a sales tax increase for light rail. It may be wise for the city to sit back and let the economy stabilize before asking the voters for more money. Speaking of Walmart . . . What has become known as the Walmart effect is being felt in Raytown. Coddington’s Grocery, a mainstay in the local economy for many years, has been reported to be planning on shutting down its Raytown operation in the near future. Part of the reason is said to be anticipated competition from the Walmart Super Center under construction on 350 Highway. When opened, the Super Center will have a full-line grocery store as part of the Walmart complex. Normally, a person could say that at least the money is staying in Raytown. But with the new Walmart, such is not the case. When someone shops at Coddington’s the sales tax collected from the sale is remitted to the city. Those tax dollars are then use to pay for maintenance and services offered by the city. If the same shopper goes to the new Walmart the sales tax is “captured” by the TIF District. The money does not go to the city’s coffers. Instead it is used to pay off the debt created by the TIF. So, not only do Raytown shoppers lose a place to shop. They also lose the benefit of their own tax dollar being placed back into the local economy. City Hires New Community Development Director Mrs. Beth Linn has been hired as the City of Raytown’s new Community Development Director. Mrs. Linn is a former employee of Merriam, Kansas where she worked as a Neighborhood Services Manager. She and her husband, who is a firefighter, live in Shawnee, Kansas.