Tuesday, October 13, 2015

Budget questions - John Ball

1. What is your view of the property tax levy: too high, about right or too low? If too high, how would you reduce it?
Response: The Manhattan property tax levy is too high. The total property tax consists of essentially 4 different taxes: State, County, School, and City. Since 2007, the city portion is up 33%.  During the last 4 years, the total property tax is up about 11% and since the state tax and school tax have been relatively flat, the major increases were in the city and county taxes.  The County tax is up about 13% while the Manhattan City tax is up about 16%.  These tax increases are not related to increased property value, but are related to increased spending and debt.  The property tax is projected to continue rising. While property taxes are controlled by multiple agencies like the State, County Commission, Law Board, School Board, and Library Board, a portion is controlled directly by the city commission.  I will work with all these groups to help lower taxes by balancing revenues with costs and paying off debt.  I’ll work with the other city commissioners to focus the city on core requirements, eliminate unnecessary spending, stop borrowing money, find efficiencies between city and county government, and eliminate waste.  All projects that consume tax money must pass the “core function” and “essential requirement” test.  Then, these projects must meet the established support or service requirement in the most cost effective manner.
2. Which social service agencies should the city be responsible for funding, at least in part?
Response: If someone needs additional help and can’t get it from family, friends, or privately funded support groups, then the city must provide a helping hand.  The city needs to help fund essential social services to reduce the probability that some issues may negatively impact city services like police and law enforcement.  I’m still developing a specific list and am open for discussion related to what constitutes an essential social service, but as of now, I would consider the following five Social Service Agencies for tax support: Manhattan Emergency Shelter, The Crisis Center, Sunflower CASA Project, Boys & Girls Club and Homecare and Hospice.  This list focuses scarce city resources on essential social services and eliminates duplication.  In addition, I’d work to improve the operations of the Social Services Advisory Board (SSAB). The board was established as a fifteen member board, which is too large to function efficiently and effectively. Also, the board appears to have become a Social Services Advocacy Board rather than an Advisory Board to the City Commission. The board refused to provide a social services priority list to the commission during the 2012 and 2013 budget discussion.

3. Does the city need to reduce its debt? If so, how?
Response: Yes.  Based on the Dec 31, 2012 debt statement, the city is currently about $260 million in debt.  About half of the debt is against the city general fund while about half has a designated tax stream (special and designated taxes) to pay the principle and interest.  When the special and designated taxes fail to meet principle and interest obligations, then these fiscal shortfalls are passed to the general fund for payment.  The property tax is currently projected to go up in order to service the debt.  The ½ cent sales tax that just passed, helped reduce this property tax increase by about 50% , but unless the city commission finds a way to cut the city budget, the property tax will need to go up to service our debt…again.  If there is an economic downturn in Manhattan, then the special and designated tax flow will be reduced.  This situation would put upward pressure on the city’s general fund and city property taxes.  Budget reductions, personnel losses, and reduced salaries at Ft Riley have the potential of negatively impacting the Manhattan economy.  The first step in debt reduction is to stop borrowing.  The city commission must pledge to not borrow any more money until at least an equivalent amount of debt is retired.  Then we can use the ½ cent sales tax funds, available special/designated taxes, and revenue saved from the general fund to accelerate debt payment.

4. What guidelines would you follow to determine how to spend the city’s 65 percent portion of the half-cent sales tax that is dedicated to economic development and infrastructure?

Response:  My personal guidelines and priorities would be to use the sales tax funds to help fund smaller infrastructure projects that would enhance quality of life and set conditions for future planned growth.  Some funds would be set aside to help fund costs that may be associated with “good” economic development opportunities.  A “good” economic development opportunity fits with the character of Manhattan, pays for itself, doesn’t increase property taxes, doesn’t require borrowing more money, is low risk, doesn’t compete with already established local businesses, and increases the tax base thereby increasing the opportunity to reduce taxes and lower debt. Companies should not be paid to relocate here, but should be attracted here because of low taxes and the exceptional quality of life offered here in Manhattan.

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