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Sales tax to fund Wichita’s transit system may be proposed

Riders board a bus at the Wichita Downtown Transit Center. The bus system faces a $2 million shortfall starting next year.
Riders board a bus at the Wichita Downtown Transit Center. The bus system faces a $2 million shortfall starting next year. File photo

Voters may once again be asked to pass a sales tax to help Wichita’s struggling transit system.

The bus system faces a $2 million shortfall starting next year, and city officials say there are few funding options to maintain the system’s current frequency and routes.

Transit Advisory Board members met Thursday to discuss recommendations to the City Council, including a one-tenth of a cent sales tax referendum this fall as part of a special election.

“Right now, the way our financial scenarios play out, a sales tax is the only way that we can really look toward a future of Wichita Transit,” said Moji Fanimokun, advisory board chair and former co-chair of Yes Wichita, which supported last fall’s sales tax.

In the referendum last fall, voters soundly defeated a 1-cent sales tax, which would have raised $400 million over five years to fund transit, street maintenance, a new water supply and a jobs fund.

Transit board members weighed how much of a sales tax would be needed to keep the system above water long term.

A sales tax of one-tenth of a cent is the same amount transit would have received last fall if that referendum had passed. The tax would generate $7.1 million next year and more than $8 million by 2018 and for the next several years, according to projections.

Of that, about $3 million a year would go toward paying transit’s debt service to the city, said transit director Steve Spade. The other $5 million would fund improvements to the system, like extended routes and hours, Spade said.

Extending routes and hours would lead to increased ridership, Fanimokun said. And those areas are tied to increased state and federal transportation dollars.

A sales tax of one-twentieth of a cent, the other option being considered, would generate about $3.5 million in 2016.

“That twentieth (of a cent) would help us meet our financial obligations,” Spade said. “But it doesn’t leave very much funding for any kind of service expansion.”

Fanimokun said she hoped to send a final resolution to the full advisory board for a vote later this week. If approved by the board, the proposal would likely go before the City Council in July.

‘Death spiral’

Wichita is at “a fork in the road,” Spade said.

City officials could try to cut about $2 million in 2016’s budget by reducing route frequencies, eliminating underused bus routes and cutting weekend hours.

But they fear lower ridership – and therefore lower fare revenue – would lead to cuts in federal and state transportation grants.

If cuts were made, transit would lose state money in 2017 and see a $600,000 drop-off in federal funds in 2018, according to Michelle Stroot, senior management analyst for Wichita Transit.

“Even though we have reduced service by $2 million, it still doesn’t leave us sustainable for long as we lose other revenue sources,” Stroot said.

Another option, a $2 million annual transfer from the city’s general fund, would only keep the system in a surplus for 2016 and 2017. Stroot said stagnant state and federal funds would eventually catch up with the transit’s budget.

“One source (of funding) increasing isn’t enough to keep it stable,” Stroot said.

Board members were not in favor of these two options, which they said only delayed an inevitable slide into further debt.

“We are in a death spiral,” said board member Richard Schodorf.

Unknown ‘appetite’

The council is interested in what the public thinks about transit’s future, and “the best way to do that is a referendum,” said council member James Clendenin.

But council member Pete Meitzner said he wasn’t sure if it’s a good idea to put another sales tax before voters after the “profound” election last fall. About 62 percent of voters said no to the sales tax. Meitzner said he would want to talk to leaders of opposition groups before supporting another vote.

“I don’t know what the appetite from the citizens would be,” Meitzner said.

Clendenin said residents made it clear that the four issues last fall shouldn’t have been bundled together.

If the bus system is alone on the ballot, Clendenin and Mayor Jeff Longwell said, they think it might have a shot at passing.

According to the Sedgwick County Election Office, the next scheduled local election is the 2016 presidential primary in August and then the general election in November of that year.

But Longwell said the city needs to act before then and he would like to see some sort of solution by the end of this year.

If the council approved a sales tax referendum, he said, a lot of things would still have to be decided, including the amount and whether to hold a special election at the polls or by mail-in ballots.

Increased state sales tax

Council members agreed that for voters, there’s only a certain amount of leniency for tax increases.

Wichita has never had a citywide sales tax. The sales tax to build Intrust Bank Arena was a county-wide tax, as is the ongoing 1 percent tax to raise money for road construction and repair.

Currently, Wichita residents pay a 6.15 percent state sales tax and a 1 percent county sales tax.

The state sales tax rate goes to 6.5 percent on July 1, meaning Wichitans will pay 7.5 percent total. Given the Legislature’s recent decision to increase state sales taxes to balance the budget, many municipalities will face a hurdle when trying to raise local taxes to pay for projects, Clendenin said.

If the transit board’s one-tenth of a cent proposal were to pass, Wichitans would pay a combined city, county and state sales tax of 7.51 percent.

Reach Kelsey Ryan at 316-269-6752 or kryan@wichitaeagle.com. Follow her on Twitter: @kelsey_ryan.

Transit information

Cost per ride: $1.75 for adults

Number of buses and trolleys: 56

For more information on bus routes, visit www.wichitatransit.org.

Transit ridership

2014

2015

Percent change

January

151,269

154,126

2 %

February

133,874

139,453

4 %

March

149,135

155,550

4 %

April

152,070

158,012

4 %

Source: Wichita Transit

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