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Pottawatomie County would want cut of city’s sales-tax revenue

By Burk Krohe

If a citywide, half-cent sales tax is put before voters in November, Pottawatomie County wants a cut. That’s the message Pottawatomie County officials delivered at Thursday’s intergovernmental meeting with Manhattan city commissioners and Riley County commissioners.

“If the city gets a sales tax, let us be a part of it,” Commissioner Gary Yenzer said.

A citywide, half-cent sales tax is one of the options being discussed in regard to the renewal of the countywide, half-cent sales tax originally passed by Riley County residents in 2002. The “roads and jobs” sales tax, so called because the county’s revenues go toward infrastructure improvements and the city’s revenues go toward economic development purposes, sunsets at the end of this year.

County officials believe they’re obligated to put the same ballot question in front of voters, meaning a similar countywide, half-cent sales tax. City officials disagree, favoring either a citywide, half-cent sales tax or two separate quarter-cent sales taxes put forward by the city and the county.

City officials have estimated that a citywide, half-cent sales tax would generate about $800,000 more in annual revenue than the current countywide tax. The increase would come chiefly from captured sales-tax revenue in the Pottawatomie County portion of the city. And that is the issue.

Pottawatomie County commissioners feel it’s only fair to take a portion of the revenues for a tax being assessed in part of their county.

“I know there’s an interlocal agreement between the city of Manhattan and Riley County on the old ballot,” Yenzer said. “If there’s a new ballot we’d like to be negotiating to see if we can work out a deal with the city.”

They said the county has infrastructure and economic development needs that could potentially be served by additional revenue from the sales tax.

City and Riley County commissioners agreed that it would be fair and said they would be open to negotiating with Pottawatomie County.

“My own feeling is whatever we give Riley and if we take Pott. County in, they should get their fair share of their area,” Commissioner Loren Pepperd said. “I think it’s up to Pott. County to decide what they want to do with it.”

Should a citywide sales tax pass, the city anticipates giving one-third of the revenues to Riley County. Commissioner Dave Lewis said it would make sense give Pottawatomie County a share of that third. City commissioners agreed.

However, the entire discussion might be ruled irrelevant by the attorney general’s office. The county has asked the attorney general’s opinion on whether it is required to put forward a similar countywide, half-cent sales tax. Commissioners agreed that a more detailed discussion with Pottawatomie County would rely on that decision.

“I feel the AG’s opinion will give us some clarity,” Lewis said.

Commissioner Wynn Butler also used the discussion as an opportunity to reiterate his opposition to a countywide sales tax because it’s not “viable.”

He said it would be a mistake to exclude the growth and development of the city in Pottawatomie County since the 2002 tax was adopted.

“I really don’t care what the AG says at this point,” Butler said.

County commissioners said a countywide tax would still be viable.

“There is a substantial success rate of what has happened in Manhattan in the last 10 years, and the revenues from the sales tax that we have had are a key component of that,” Lewis said.

Lewis said it would be difficult to say a countywide tax is not viable based on the growth the city has seen. He added it’s hard to dispute the success. Butler countered that the “definition of success really depends,” noting the rising city debt over that 10 year period.

“It’s easily disputed by looking at your tax bill,” Butler said. “It’s that simple.”

Commissioner Rich Jankovich said the two sides should be looking to the future instead of the past.

“It’s conjecture until we have the AG’s yea or nay,” Jankovich said.

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