June 28, 2014

Replacing property tax with sales tax divides Sedgwick County Commission candidates

The idea of replacing Sedgwick County’s property tax with an increased sales tax is drawing mixed support from candidates for the county commission.

The idea of replacing Sedgwick County’s property tax with an increased sales tax is drawing mixed support from candidates for the county commission.

Only two candidates support the idea proposed by District 3 Commissioner Karl Peterjohn.

But if those two — incumbent District 4 Commissioner Richard Ranzau and District 5 challenger and state Rep. Jim Howell — were elected, a majority on the commission would support asking voters to approve the change.

District 4 covers the north-central part of the county including Valley Center and Park City. District 5 covers the southeastern part of the county including Derby.

Peterjohn has estimated that replacing the county’s portion of property taxes would result in a 1 1/2- to 1 3/4-cent sales tax increase. Cities, school districts and other taxing entities still would collect property taxes. The majority of the property taxes that residents pay go to schools.

The county’s mill levy this year is 29.3 mills, which represents about one-quarter of a property owner’s total tax bill. A mill is $11.50 annually on a $100,000 home.

“I think it’s a good idea personally, but I wouldn’t want to do it unilaterally,” said Ranzau, who faces former commissioner and state Sen. Carolyn McGinn in the Republican primary. “I’d want the public to vote for it.”

Ranzau said property tax abatements are used as an economic development tool to lure businesses. “If lowering property taxes is helpful for some, then it’s helpful for everybody,” he said.

“The three-legged stool is something created by the progressives, and it’s about wealth distribution and not about funding government,” he said at a recent meeting of the Wichita Pachyderm Club, alluding to property, sales and income taxes, the three-pronged revenue approach most governments use.

Opponents of replacing county revenue from property taxes with a higher sales tax say the county needs to have diverse sources of money coming in to fund services.

“Maybe the economy is down, and sales aren’t going as well,” McGinn said. Property taxes are important “so you always have some kind of stream of revenue.”

If the economy changes and people aren’t buying extras, or even cutting down on necessities, the county would be forced to cut services, opponents of a sales tax increase said.

District 4 Democratic candidate Melody McCray-Miller, a former commissioner and state representative, said increasing the sales tax would be devastating for some.

“It is the most regressive tax, and it penalizes those who can least afford to pay it,” she said. “I think it’s an easy way out. We can do better.”

Candidates also are split in District 5.

Derby Mayor Dion Avello, a Republican, said he initially supported increasing the sales tax to replace property taxes but changed his mind.

“If you have a couple of bad years and you don’t have a base, it’s not going to work,” Avello said. “You’re going to be in trouble.”

Howell said in the best world, he would get rid of property taxes and not raise the sales tax.

“At least with sales tax, you have a choice,” he said.

District 5 Democratic candidate Richard Young, a former mayor of Rose Hill, said he could not support increasing sales taxes.

“. . . That would shift the revenue burden to those with less income,” he said in an e-mail.

District 1 Commissioner Dave Unruh, who does not face a challenger in his election, said he also is against increasing sales taxes to replace the county‘s portion of property taxes.

“It’s not a good idea,” he said. “We need stable revenue sources, and I think our revenue sources need to be spread as much as possible but have the tax rate mill levy as low as possible.”

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