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Sales tax intent: stabilize Holcomb mill levy
Published 10/10/2008 in News : Politics
By STEPHANIE FARLEY
HOLCOMB -- Holcomb City Councilman Gary Newman's biggest fear about the upcoming vote on what would be the city's first sales tax is that enough word isn't getting out to where Holcomb residents understand the initiative.
The council approved in August pursuing a half-percent sales tax, which would be charged on products sold at the city's businesses, that councilmen hope could relieve some of the burden on property tax. The city currently doesn't have a sales tax, so businesses in Holcomb only are required to collect county and state sales tax, which comes to 6.2 percent. The half-percent sales tax would bump the sales tax in Holcomb to 6.7 percent.
The sales tax issue is up for Holcomb voters' approval in the November general election.
Up to this point, Newman and others involved with the initiative have been spreading information on the sales tax through word of mouth. That'll change at 7 p.m. Oct. 23, when Newman and others with the council and city are having an informational meeting for the public to explain the reason the council proposed the sales tax initiative. The meeting will be at the USD 363 district office.
The word "tax" scares some people, Newman said, explaining he's been waiting to spread more information until closer to the Nov. 4 election, so it's fresh in people's minds. Additional public meetings hinge on turnout at the Oct. 23 meeting, he said.
The goal, Newman said, is to ensure everyone has a good understanding of the sales tax and how revenue from the tax would be used. He said he hopes the public attends the meeting, adding it doesn't matter whether those attending support or oppose the sales tax initiative.
Either way, Newman said, "we'd like to hear it."
A use for the tax
According to Newman, the current idea for the sales tax revenue is that it would go into a general fund for special projects, city improvements or other initiatives for the city that could be used to potentially minimize the impact to the city's mill levy.
"It gives us a reserve fund, basically," Newman said.
There are no projects or improvements the sales tax revenue is specifically targeted for at this time, Newman said.
Newman said he feels the sales tax would be a way to take advantage of the people who pass through the town to eat at the restaurants and visit Holcomb's other businesses.
"We could use their visit and purchases to our advantage," he said, if the sales tax is approved.
Newman has been considering the idea of a city sales tax ever since he came on the council last November. He started meeting with a group of about eight citizens about 1 1/2 months before council approval of the sales tax initiative to gather input on the city pursuing the sales tax.
Newman said the public's main concern from those meetings was how the sales tax revenue would be used, and that it wouldn't be misused.
"That was a concern, and it's a very valid concern," he said.
Newman said that concern is why input from the community is critical now and in the future. While this council intends to use the tax revenue to help relieve some burden on taxpayers, Newman said, that may not be what future councils intend to do with the revenue. Holcomb residents can voice their opinion on what the money should be used for, he said.
Newman said he'd like to see the city's mill levy either stabilize or decrease annually. The mill levy is the tax rate applied to the assessed value of property -- a mill is $1 per $1,000 of assessed value. To the owner of a $100,000 home, Holcomb's increased levy this year from 48.468 mills to 49.697 mills for the 2009 budget means about $572 in taxes a year -- an increase of $15 from 2008. The city's mill levy decreased between 2007 and this year, going from 49.985 mills to 48.468.
There's no guarantee the sales tax would lower the mill levy, Newman said, "because we don't know what the needs of the city are going to be." Some things are out of the city's control, he said, adding that the cost of fuel for the city is an example of that.
"But we have to start somewhere," he said.
Newman said that when he mentions the proposed sales tax, "people hear the word 'tax.'" And that's all they hear, he said, adding, though, that when he's had the opportunity to explain it's a sales tax only for Holcomb and that it would be used to help lessen the impact on taxpayers, he hasn't heard too much negativity.
But, Newman's certain there are others in Holcomb who are concerned and bothered by the proposed tax.
"These are the people we want to explain it to," he said.
Ron's Market
Ron Leonard, owner of Ron's Market, 106 N. Jones Ave., doesn't feel an additional tax on his products would hurt business at the store.
His concern is the same as what Newman said the concern has been for others: the sales tax revenue's use.
Leonard said he feels a city sales tax would be good if it were used to help lower property taxes. But, he said, he only favors the tax if the revenue will be used for what the council says it will be used for.
A property tax decrease "would be tremendous" for the city, he said.
Some who move to the town, he said, overlook the town's taxes because they believe the city's school district is one of the best, and they want to be a part of it. Anything that could lower taxes would simply be another plus for Holcomb, he said.
Leonard said he likes the idea of a sales tax vs. another tax in the city because "everyone chips in" that way.
Leonard just doesn't want to see the revenue misused, but rather, he said, "put it to good use.
"And it could be," he said.
Chef Quintin Perry, also known as "Chef Q," recently started a restaurant, Perry's Homecooking, in Holcomb and said he thought any increase in taxes, at this time, with the economy like it is could hurt smaller businesses. He said the cost of operating a restaurant -- including the cost of meat, produce, dairy and other supplies -- has increased.
But if the money's allocated correctly, he said, it could benefit Holcomb. Perry also said a sales tax helps because it doesn't come out of the pockets of the business, but rather the customer.
Another tax
In a letter Councilman Greg Cox wrote, he states, "Holcomb, are you ready for another tax increase? I'm not ready to go out on a limb and campaign for this new tax. Although my colleagues on the governing body in Holcomb may disagree, I think I have a good feel for voter sentiment on tax issues."
Cox said that with the cost of almost everything rising, "we are forced to scale back and prioritize our spending. Why then, can we not expect the same from our local government?"
Cox said there's no guarantee the tax revenue would lower the levy.
"Who is to say that when this revenue starts to pour in, this governing body may decide that it needs another unnecessary administrative position that does not directly serve the public...." Or, Cox said, spend the revenue on other uses.
He also said he's concerned with the sales tax applying to taxpayers' utilities.
On Nov. 4, voters in Holcomb will face the question: "Shall a retailers' sales tax in the amount of one-half of one percent be levied in the city of Holcomb, Kansas for the general purposes of keeping property tax increases to a minimum and such other general governmental purposes as may be in the best interests of the city of Holcomb, to take effect April 1, 2009?"
Cox asks voters in November to "send an overwhelming message to the city council to live within the means of the taxpayers."
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