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Sales tax idea sounds OK, but…

City voters might choose street funding method

By The Mercury

Maybe Manhattan taxpayers will go for a sales tax increase to fund city street maintenance — the idea has its attractions – but we can’t quite shake our misgivings about the idea.

For starters, street maintenance, a city responsibility, has traditionally been funded through property taxes. Few taxes are less popular, however, as inflation and rising property valuations seem to conspire to complicate life for homeowners. Added to those is the fact that street maintenance — never mind lane additions and other improvements — is expensive.

It quickly becomes apparent why some city commissioners wonder whether city residents would be willing to pay higher sales taxes instead of higher property taxes to subsidize street work. Commissioners are leaning toward adding the question to the ballot at either the general election in November or the municipal election next April.

To bring the city’s roads up to a nationally accepted standard by 2014 would cost as much as $4 million a year for the next decade. The city’s projections indicate that even with the existing annual street maintenance budget of $1 million, it would take a 0.30 percent sales tax increase to generate that much money. The present sales tax in Manhattan is 8.4 percent. The statewide sales tax is 6.15 percent; the city levies an additional 1.25 percent, which voters approved; and Riley County levies 1.0 percent, which voters also approved.

The key attraction of the sales tax is that visitors to our fair city - and the generous number of them seems to be on the rise — would help by paying sales tax on everything they buy here. Some of that – how much might also be up to voters — would go toward street maintenance.

A problem with using the sales tax for street repairs is fairness. As City Commissioner Karen McCulloh pointed out, it is a regressive tax in that it takes a greater toll on the incomes of poor people than it does on the affluent.

A problem that we have is that just as the property tax has traditionally funded infrastructure and other needs, the sales tax is often dedicated to more optional items — to extras, if you will. Economic development, improvements to the city pools, Sunset Zoo and quality-of-life issues might not be “extras,” but neither do they fall into the same category as streets or police and fire protection.

What’s more, if the sales tax is raised to pay for infrastructure needs, voters — who are sensitive to sales tax increases as well as property tax increases — might be less inclined to raise the sales tax for other quality-of-life measures. This could go from the theoretical to the real if plans for another bond issue for recreational facilities are solidified.

What’s worth noting is that in putting this sales tax on the ballot, the City Commission wouldn’t be asking voters whether they want streets improved. We’d like to believe those needs are apparent to drivers as well as to engineers. What the commission would be asking is how voters want to pay for the street work, or at least much of it.

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