Sales Tax Questions
Why are we voting for a sales tax increase?
Pleasanton strives to be a good steward of public money. The city has worked hard to lower property taxes. The 2023 budget shows a decrease of 7.541 mills from the previous year. In today’s tumultuous times, inflation has had a direct impact on the cost of goods for everyone, including the city. We have upgraded our water lines and meters, built a new community center, added safe routes to schools by installing sidewalks throughout the city. We have taken every opportunity to pass funds onto business owners during the recent pandemic.
Currently, much of our revenue comes from property tax. The Kansas Legislators have imposed new standards for budgeting that encourage cities to stay ‘revenue neutral’. To remain revenue neutral, cities cannot levy more than the levy that the county calculates to get the exact amount of property tax revenue they received in the previous year. A city can hold steady on its mill levy and still exceed the revenue neutral rate because of increases in the appraised value of homes. If a city were to opt to exceed the revenue neutral rate, the city must send notice to the county clerk of its intent to exceed the revenue neutral rate. In turn, the county would mail out notices to the residents and there would be a public hearing held. At that meeting, the city will also conduct a public hearing on the new budget with the council and potentially adopt the new budget. The notice to the residents will be mailed in early August. The cost of mailing the letters to all the residents will rest on the shoulders of the city.
Regardless of local growth in property taxes, the city is in a situation where it needs to generate more income to address our deteriorating streets. For each mill levied, the city will receive an additional $11.00 per household. To offset the cost of a major street project, the city would be looking at increasing the mill levy by well over 30 mills. Only the registered voters in the city of Pleasanton will be voting on this ballot question.
Don’t I already pay a city sales tax?
In 1995, the city passed a .01 cent sales tax to aid the budget. The current sales tax was not earmarked specifically for one department. It was intended for aiding the entire budget. (see attached publication and ordinance)
We currently have a budget for Consolidated Streets that is funded by ad valorem property tax, gasoline tax, and transfers from the general fund. This budget is all-encompassing and covers everything from payroll, insurance, utilities, equipment, and supplies. The 2023 expenditure amount is $326,715 and the anticipated income amount is $328,499. The amount of tax dollars received for that budget is not enough to take on a large-scale project, let alone maintain our current roads.
Cities often finance large projects through General Obligation bonds (GO Bonds). GO Bonds are high value loans at lower interest rates over a longer period. In 2015, the city completed a large-scale water line project, updated old meters to electronic meters and completed many important improvements to the water plant. In addition to grant funds, the city received a GO bond of approximately $3,800,000.00. This equates to a yearly payment of $150,661.00. If the city were to take out a GO Bond to do the roads, we can expect approximately the same payment on a loan of this size. The current interest rate for a GO Bond is 3.75%.
Should this proposed sales tax pass, all monies collected will be allocated to the Special Streets budget to fund repayment of loans that will facilitate major road repairs. It will also be used for materials and equipment for repairing and maintaining the streets. Ideally, we would want to do a major overhaul project and still be able to have enough money in that fund to maintain those roads after the project is complete. A GO Bond of $7,500,00.00 would cost the city approximately $343,000.00 per year to repay.
If the sales tax is approved, who will be paying the taxes?
People that make purchases in Pleasanton will be paying the sales tax, regardless of where they live. This means that visitors that come to Pleasanton will share the burden.
What if the sales tax question doesn’t pass?
The city of Pleasanton will have to look at reductions in costs and search for additional sources of revenue. This could also mean a reduction in services and potentially less expensive maintenance. There may also be higher charges for things like permits, licensing, and fines. Lastly but most importantly, the city would have to look at raising the current mill levy.
Who gets my sales tax dollars now?
The current sales tax rate is 8.5% in Pleasanton. 6.5% of that tax goes to the state of Kansas. 1.0% goes to Linn County for the judicial center and 1.00% goes to the city of Pleasanton. The state of Kansas is currently working to eliminate sales tax on food. Your local tax rates will still be in effect on food purchases.
What are the tax rates in surrounding cities and counties?
CURRENT TOTAL RATE
How much more will this cost me when I purchase things in Pleasanton?
For every $1.00 you spend, it will cost you .01 cents in additional local sales tax.
Current local sales tax: Proposed local sales tax:
$10.00 + .10 cents=$10.10 $10.00 + .20 cents=$10.20
$100.00 + $1.00=$101.00 $100.00 + $2.00=$102.00
$1000.00 + $10.00=$1010.00 $1000.00 + $20.00=$1020.00
$10,000.00 + $100.00=$10,100.00 $10,000.00 + $200.00=$10,200.00
How much will the city make off this tax?
Below is a chart of sales tax the city has received since 2019. Based off the total sales tax received for 2022, the city would gain approximately $300,053.92 per year in sales tax.
What will it cost to rehabilitate all the roads in the city of Pleasanton?
The county provided the following information regarding roads in each city. These totals include paved, gravel, and dirt roads as well as platted roads that have not been built.
Linn Valley=49 (primarily dirt, gravel, chip and seal)
The city of Pleasanton has more miles of paved roads than any other city in Linn County. There are approximately 21 miles of paved surfaces in the city limits. Cost varies greatly depending on the type of project. Many of our roads will need to be milled down before laying asphalt. Other roads can be patched and then we can proceed with overlay. Other less used roads can be milled and we can do a reclamation of that material to chip and seal those roads. The cost difference to do a reclamation project vs milling and overlaying the roads is substantial. At $1 to $5 per square foot, chip-seal roadways are much more budget-friendly than the cost of an asphalt overlay with 2” of asphalt, which is usually around $7 to $13 per square foot. A four-inch removal and replacement can cost from $380 to $680 per 100 square feet. Given the state of disrepair our roads are in, we would need to focus on milling the current road down to a usable base. The road edges would need to be brought down to grade to avoid pooling of water and promote good drainage. These factors will certainly increase the initial cost of the resurfacing project. To overlay, the current road must be suitable and in good repair. We are currently working with engineers to calculate the cost of total rehabilitation of all the paved surfaces in Pleasanton.
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