November 23, 2013

Council weighs possible sales tax initiative for city’s projects

City Council members are weighing whether to ask Wichita voters to approve a long-term city sales tax to pay for a multitude of projects.

City Council members are weighing whether to ask Wichita voters to approve a long-term city sales tax to pay for a multitude of projects.

Confronted with a daunting list of community development projects carrying a tab that could exceed $1 billion, several council members told The Eagle they have begun internal discussions about packaging the projects in a multi-year sales tax initiative similar to Oklahoma City’s MAPS, an acronym for Metropolitan Area Projects. A public vote could come next fall or later.

Details are still fuzzy — there’s no consensus yet about the size of the sales tax, what it should build, how much it should raise or how long it should last before expiring. But several council members say that it is time to take the public’s temperature on the idea and the projects it could produce.

“Absolutely I’d think that it’s time for those conversations to start,” council member Jeff Longwell said. “It’s time for us to be proactive in terms of soliciting from groups that would like to see the city do X, Y or Z.

“And of course, some of it is going to evolve over the next year or so – what comes out of this whole look at Century II and the civic center. This is not an issue of Wichita being able to afford these things. It’s an issue of where we want the city’s debt load to be.”

Oklahoma City used a similar strategy successfully: Package a bunch of quality of life projects that might be unlikely to pass by themselves together in a “something for everyone” approach.

So what’s on the city wish list? There’s no agreement on that, either. But here are projects and needs that have been mentioned.

• A cash “war chest” for economic development, to be used to fend off cash offers from other states for Wichita businesses, and to recruit new businesses to town.
• An additional water supply, ideally to handle the next 50 years.
• New or renovated convention and performing arts space.
• An enhanced transit system.
• Additional money for water and sewer system repair and replacement, and for street improvements.
• A new central library.
• A new or renovated Lawrence-Dumont Stadium.

The consensus priority right now is job creation, some council members said.

“Everybody agrees that we need jobs,” said council member James Clendenin. “If we can show a specific plan for a mechanism to attract jobs to Wichita and put it in place, and then show how other communities like Oklahoma City, Dallas, Omaha and Des Moines are using their own war chests and incentive tools to take our jobs, then I think that most people will listen.”

No property tax increase

How the city should pay for projects is bigger than just a sales tax vote, Longwell said: It’s about the city dedicating its debt load prudently to infrastructure and related projects.

“We are not broke. That’s a huge misconception,” Longwell said. “We live with a balanced budget, we have $25 million in reserve for emergencies and our debt load is under 50 percent because we’re paying it down ... I view not wanting to overextend ourselves on a new downtown library as good debt management, not being broke.”

Council members have said they don’t want to increase property taxes.

“I won’t discuss anything that involves raising property taxes,” council member Jeff Blubaugh said.

About a year ago, council members visited Oklahoma City to examine how a conservative, economically struggling city passed the first of two successful longterm sales tax initiatives. Voters approved a temporary one-cent sales tax in 1994 and extended it for six months before it ended in 1999. The tax collected more than $309 million, with that money earning another $54 million in interest.

Vice Mayor Pete Meitzner said he needs more specific information about projects and costs. But he notes the success locally with the county sales tax that built the downtown arena.

“We built the Intrust Bank Arena with a sales tax that’s done and sunsetted,” he said. A voter-approved 30-month 1-cent sales tax raised more than $200 million to pay for construction of the arena.

Meitzner said that Wichita is one of the few Kansas municipalities without a city sales tax, although Kellogg improvements are funded in part by a one-cent countywide sales tax approved in 1985.

“We have a county tax. Ninety-six or so of 105 counties have a county tax, including Sedgwick County, but the city of Wichita does not have a city (only) sales tax,” the vice mayor said.

Credibility gained, lost

The kind of credibility Intrust Bank Arena could bring to any future sales tax vote “is the most important element you’ll face, more important than the individual projects,” said former Oklahoma City mayor Kirk Humphreys, a developer.

“It’s the most important thing you’ll face, period,” Humphreys said. “That’s why you must have a leader like (former Oklahoma City mayor) Ron Norick, someone with credibility who’s willing to put it all on the line and say, ‘Come follow me.’ ”

Oklahoma City’s political climate in 1994 was not unlike Wichita today, Humphreys said.

“We were a people very skeptical about government, very much anti-tax,” he said. “It took someone like Norick with a lot of political capital – his father was a two-term mayor and Ron served three terms – who could put it on the line and tell the people, ‘Trust me.’

“And then you must deliver. If you don’t, the party’s over.”

That trust is a significant worry at Wichita’s City Hall, where some council members wonder how a 2014 sales tax vote could overcome the stigma of the city’s past failures, including the historically underperforming WaterWalk riverfront development and the Minnesota Guys office and residential partnership with City Hall that unraveled.

“We do have credibility with the county through the arena,” Clendenin noted. “And maybe that’s the only thing I can point to, unfortunately.”

That might not be enough to succeed at the polls in Wichita, with Americans for Prosperity waiting in the wings and a City Hall that struggles with messaging, some council members said.

Local AFP spokeswoman Susan Estes said that group will oppose any sales tax vote.

She said her membership will “want to take a hard line, a hard look at this and be prepared to take action at a grass roots level.”

“We’ve been watching this as a distinct possibility for some time because the signals have been there from comments by the manager and some council members,” Estes said. “We’re very concerned about the harm this will do – taxing the people who can afford some of this the least, continue to make us less competitive. We definitely will want to look at the final details.”

Clendenin acknowledged the probable opposition to a sales tax.

“It will be a tough sell,” he said.

“Until we can message this, get the facts out and educate the people, they’re not going to vote for it. Before you move forward, you damn well better have the message in place and the mechanism to get it out to the citizens of Wichita, and you better have your facts straight.

“If you don’t, the citizens won’t inherently trust us. They need a reason to trust that what we say is true, and that has to be data-driven. If we can’t get that done, then we need not talk about this further.”

Council members are clear: No sales tax initiative will be placed on a ballot by the council until a list of projects and costs, the amount of tax and its length are defined. Also any sales tax vote would be reserved for a general election – in fall 2014 at the earliest.

Multiple projects

Some advocates of big-ticket items are already lining up behind a Wichita MAPS project, with the knowledge that their projects are years down the road, or impossible, without it.

Ron Terzian, who chairs the city’s transit advisory board, has already advocated personally for sales tax support to stabilize and enhance the city’s bus system.

“When the transit advisory board endorsed the vision plan, we did not specify any desired source for the funds required for transit (about $25 million annually if the system is enhanced),” Terzian said.

“Having said that, it is obvious that we need a sufficient and reliable funding source. It is also clear that the status quo is like saying that transit is not important to Wichita, and service will continue to degrade in the 50th largest city in the United States.”

Library board member David Babich said the timing is right for a sales tax-supported downtown library.

“Federal money is drying up, state money is drying up. We proud Wichitans need to take matters in our own hands and build a community that represents our interests and our values and the generations that follow us,” he said.

“The timing is also very good. The library board is in the design phase of a new library and the existing location can be part of the comprehensive plan for use by convention, performing arts and parking. The performing arts community wants to be included and the convention business is seeking a venue that proposes to pay its way.

“Economic activity is picking up and a city sales tax would put us in the same position as many other cities. It need not be a county tax in my mind unless it is determined that the county would be a net supporter of the referendum. Wichita is the trade center of the region and a sales tax would collect revenue far wider than the Wichita community. A sales tax would also have the effect of reserving other city resources for infrastructure needs.”

Oklahoma City’s Norick said MAPS could work in Wichita, if the city executes the plan Clendenin outlined above.

“You must understand that with our first MAPS vote, we had polling that suggested every individual piece of it was going to be voted down,” the former Oklahoma City mayor said. “Everyone had a pet project, or one they were totally opposed to.

“The key is selling these projects of yours as a whole and not the pieces, because if you get diverted on the individual pieces you’ve lost your ultimate goal: a better quality of life for your folks.”

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