Editorials

Avoid sales-tax districts

As of the 2009 legislative session, the Wichita City Council can raise sales taxes as much as 2 percent on certain Wichita customers at the request of businesses, by designating them as part of a community improvement district and using the proceeds to help finance their projects. That gives such tax hikes the unusual appearance of being business-friendly, also making them more politically palatable.

But such districts should only be created strategically, cautiously and rarely. They smack of handing over taxation to private industry, as they invite a patchwork of sales-tax rates across the community.

If council members are going to require some Wichitans to pay 9.3 percent sales tax, it should be for a powerful reason — such as for a mission-critical downtown project that serves a significant public good and wouldn't happen if not for the establishment of a community improvement district.

In the case of the Marriott Fairfield Inn and Suites at WaterWalk, that description might fit. Wichita has lost multiple conventions and events, including its first attempt to attract the NCAA men's basketball regionals to the Intrust Bank Arena, because of insufficient hotel rooms downtown. The council approved the Fairfield Inn's community improvement district last month.

Similarly, the council will discuss today whether to set a public hearing on Oct. 5 for a CID proposed by the Drury Plaza Hotel Broadview. That proposal, under which the extra 2 percent sales tax would help fund the historic hotel's $29 million renovation, is one of three the council will consider today. The two others raise questions and shouldn't be approved:

* While the companion proposal to designate a tax-increment financing district makes sense, is it really wise or necessary to help finance a badly needed Save-A-Lot grocery store in low-income Planeview by increasing sales taxes on its customers? For example, the Save-A-Lot at 13th and Grove, also a neighborhood godsend, was funded through other means.

* In the cases of the proposed Maize 54 community improvement district, for the planned Bowllagio bowling and entertainment center complex at Kellogg and Maize Road, and another CID pulled Monday from today's agenda, for a project at 27th Street North and Maize Road, the question is why this tax-hike tool should be necessary in fast-developing areas on the city's fringe.

More CID proposals are certain to come, especially if the council is liberal in allowing them. That's another reason why the council needs to be very cautious about approving them and have clear guidelines for evaluating the public benefit.

Such tax hikes may have the blessings of developers and businesses, but the responsibility for them rests with the City Council.

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