James' huge tax and bond plan keeps evolving
Yael T. AbouhalkahThe huge tax and bond plan unveiled last week by Mayor Sly James continues to evolve this week.
The work being done behind the scenes by James, City Council members, the city staff and a few others is aimed at keeping the sales tax and property tax increases on the proposed August ballot, but finding ways to make them appeal to voters.
That’s positive because - even though James correctly wants to promote more money to maintain KC’s infrastructure - he and City Hall must give voters a good, structure plan to spend the hundreds of millions of dollars in higher taxes they want to seek.
On Monday, I wrote about how the flawed version of the ballot language for three questions introduced last week would make it possible for voters to approve a sales tax increase without getting any of the much-hyped tax decreases promoted by a citizens panel.
That makes no fiscal sense for voters, and that version should not make it to the ballot.
Today, here is some discussion of the issues that now surround the sales tax proposal, Question 2, regarding the money it’s supposed to provide for the parks department and for the Water Services Department to pay for stormwater improvements.
- On Monday, Parks and Recreation Director Mark McHenry pointed out that his department would lose $10.7 million if the taxes in Question 1 are repealed by voters.
So his department is hoping to get the 60 percent split of the sales tax recommended by the Citizens Commission on Municipal Revenue. That would be about $18 million of the $30 million or so generated by the sales tax, minus TIF redirections.
That would give the department a surplus of about $7.3 million over current funding.
However, approval of Question 1 also would end collection of about $3.3 million for road improvements, paid for by the Public Works Department.
And because the sales tax has to be used for parks-related spending, the city wouldn’t be able to grab some of that money for the road repairs done by public works.
Why is this important to point out? Because Mayor James and others have tried to link Question 1 to Question 3, saying the bonds in Question 3 are needed to help pay for that public works spending. But that doesn’t have to be the case. The $500 million in bonds in Question 3 should stand by themselves.
Here is one potential solution.
The parks department could supply the $3.3 million from its regular budget to the Public Works Department. Then the parks department could use some of the new sales tax money to supplant the money it gave to public works.
Voila: Everyone is happy.
- The second part of the sales tax is supposed to be set aside for stormwater improvements. It could be around 40 percent of the sales tax, or $12 million a year, if the citizens group’s recommendations are followed.
As I noted Monday online, however, the Water Services Department already is getting double-digit rate increases for its water and sewer services. So adding yet another tax to pay for stormwater upgrades could be problematic.
City water department officials did not respond to my efforts to reach them Monday.
However, as a council member explained to me, the stormwater effort does need more funds. If that money comes from the sales tax, and if that money is spent on helping to improve the related sewer system as well, it’s conceivable the city could hold down some future water rates.
That’s a plausible but awfully complicated way to tell people what’s happening with their money.
One other problem for the stormwater folks: The citizens revenue commission never approved a plan that called for stormwater improvements. True, this group is not technically a spending panel. But it’s still notable that the group said it wanted rate relief for water customers if the sales tax passed. No one from the city urged them to put the sales tax on the ballot so the Water Services Department could get a lot more money than it currently receives.
The council is looking right now at making sure the ballot language is as simple and understandable as possible. I’m told some of the details for the spending will come later.
That’s going to have to be done fairly quickly, however, with a May 24 deadline for putting something on the ballot and with an August election date fast approaching.
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