The majority of the Manhattan city commission supports placing a city sales tax question on the November ballot.
The city commission on Tuesday explored a proposed 0.5% sales tax, starting in 2023, which would generate $6.5 million annually. That money would be split three ways, with 20% to reduce city government debt, 20% distributed to the Manhattan Area Chamber of Commerce for economic development and 60% toward public infrastructure.
That sales tax would effectively replace Riley County’s expiring roads and bridges and economic development sales tax, which was split between the city and the county. The tax rate would remain the same, at 8.95%, for the portion of the city in Riley County if the county doesn’t attempt to renew the sales tax for 2023 — and it has said it doesn’t intend to. The new tax would raise the rate for the portion of Pottawatomie County in Manhattan to 9.45%, said Jason Hilgers, deputy city manager. The affected portion of the city includes Walmart and all of the businesses east of Tuttle Creek Boulevard.
“This (0.5% sales tax) is about Manhattan’s future,” said Hilgers.
Hilgers suggested it might be a good idea to place the question on this year’s ballot since it is a presidential election, which typically generates more voting participation.
Commissioners Mark Hatesohl and Wynn Butler expressed support for placing the question on the November ballot.
Commissioner Linda Morse had some reservations about the measure but ultimately said she would support it.
“I’m not excited about a sales tax for this coming fall election,” Morse said. “I will go along with it if that’s the majority of the commission’s will.”
Mayor Usha Reddi said she wouldn’t feel right placing a question on the ballot this year.
“I would feel a little insensitive thinking we can put this on the November ballot for this year,” Reddi said.
Reddi said she was not necessarily in favor of the proposed 20/20/60 split and wanted more information.
“So I’m even on the fence about how to dedicate this money to the chamber or anybody else at this point,” she said.
Reddi said she didn’t want to place this question on the ballot especially as the city weighs significant budget cuts because of the coronavirus pandemic.
“This is not the year for it,” she said.
Butler said the key point is that the tax does not take effect until 2023 and can help the city recover from the coronavirus outbreak.
“But if we don’t get this tax in place, we’re just going to prolong the agony,” he said.
Commissioners placed emphasis on providing education to the public about the initiative in order to let the public know what the city wants to do with this.
“The trick here is going to be educating the public,” commissioner Aaron Estabrook said. “And I think if we give them something to vote for, they’ll vote for something.”
Estabrook said he wanted to place a workforce housing component within this sales tax measure. He said if that was added, he would be in support of this.
This topic came up in discussion as the current sales tax initiative expires at the end of 2022. The Riley County Commission last month decided not to place a county sales tax question on the general ballot this election.
Commissioners Tuesday did not take any formal action on the matter.
The decision on this topic must be made before Sept. 1. The city plans to discuss this again.