MoDOT proposes deal to avoid sharp sales tax increase for KC streetcar district

07/04/2014 11:48 PM

07/04/2014 11:55 PM

An unusual deal is coming together to try to avoid a train wreck of transportation tax issues on the August ballot.

Voters in much of Kansas City south of the Missouri River will see a proposed taxing district for extending streetcar lines beyond downtown, which could ultimately require a 1-cent sales tax increase.

But they’ll also see a three-fourths-cent Missouri transportation sales tax increase, Amendment 7.

Many are worried that neither measure will pass on Aug. 5. In fact, some are sure the tax proposals could doom each other.

So the Missouri Department of Transportation has proposed allocating more than $100 million from its transportation tax to Kansas City’s streetcar project — if voters approve Amendment 7.

That could significantly affect how much Kansas City taxpayers in the streetcar district would ultimately pay.

If the taxing district passes on Aug. 5, it sets up another election in November in which those same voters would decide a maximum tax for the streetcar. Missouri’s proposal would help reduce the local streetcar sales tax from 1 cent to one-fourth cent for the next 10 years.

In other words, the combined state and local sales tax increase within the streetcar district would be limited to 1 cent.

The state’s proposal has plenty of skeptics, and it isn’t yet final, but supporters say it may be the only way to have a reasonable chance of success on the August ballot.

“It isn’t palatable or desirable to have a 1.75 percent sales tax (increase) in the area potentially impacted by both the MoDOT tax and the streetcar tax,” said Joni Wickham, a spokeswoman for Mayor Sly James.

Wickham said the goal of the negotiations was to garner voter support for both the Missouri highway improvements and the streetcar expansion “without overburdening taxpayers.”

James himself described the negotiations between the mayor’s office and city and state officials as a breakthrough in a state that has rarely provided significant funds for transit.

“This time it’s different,” James said. “Amendment 7 allows us to address transportation infrastructure and transit systems simultaneously and in a coordinated approach.”

The proposal came as a relief to Greater Kansas City Chamber of Commerce board members, who were worried about the piling up of tax proposals, chamber spokeswoman Pam Whiting said.

“That was a major concern of our board and officers — the fact that if the MoDOT tax and the streetcar tax were both approved, some areas of the city would see an increase in sales tax of 13/4 cents, and that was not palatable,” Whiting said.

The chamber’s board has now said it will support Amendment 7 if the city and state can agree that the combined additional sales tax in the streetcar district will be no more than 1 cent over the next 10 years, and agree how the money will be allocated.

However, Whiting noted, the chamber’s board has not taken a position on the proposed streetcar taxing district on the August ballot.

The allocation of state money for the streetcar and other projects will become clearer Wednesday. That’s when the Missouri Highways and Transportation Commission is to vote on a list of approved projects for the transportation sales tax.

Kansas City officials are optimistic that $144 million will be included for the Prospect Avenue MAX bus and the streetcar expansions on Main Street, Linwood Boulevard and Independence Avenue. That’s because those projects are on a list recommended by an influential Mid-America Regional Council panel that met July 2.

The recommended list for the Kansas City region totals $775.7 million, and contains other improvements, including portions of Interstate 70, Area Transportation Authority bus system maintenance, the Katy Trail Extension, Northland and Lee’s Summit highways, the Broadway Bridge replacement and bike-pedestrian projects.

“We’re trying to create a project list that voters will support,” said Dan Niec, Kansas City district engineer for MoDOT, told the regional council’s Total Transportation Policy Committee.

The streetcar expansion got a huge chunk of funding on that regional list, though city officials acknowledge the project will still need tens of millions more in other state transportation dollars over 10 years to truly limit the local streetcar tax to one-quarter of a cent. The streetcar plan also is predicated on Kansas City receiving more than $200 million in federal funds.

The streetcar campaign already is trying to get word about the deal out to voters, who won’t see it in the ballot’s language.

Critics remain unconvinced that having the city and MoDOT work together will be enough to garner support for either the state transportation tax or the streetcar expansion.

Janet Rogers, co-founder of the Transit Action Network, a local transit advocacy group, said she knew the streetcar was included in the MoDOT list as a way to garner more local support for Amendment 7.

But Rogers said her group still has major problems with using sales taxes rather than gasoline taxes to fund highway improvements, and the negotiation won’t be enough to change that.

“This is mainly a roads bill,” she said. “Transit is the carrot they’ve given people to get them on board. But roads ought to be paid for by users.”

And though the deal may entice some voters, it may turn off others who would otherwise support more highway funding but vehemently oppose the streetcar.

“That (state) tax is for roads and bridges,” said Dan Coffey, who is part of a group opposing Kansas City’s streetcar expansion plans. “I want repairs for our streets, roads and bridges, but I don’t want to fund the streetcar.”

It’s unclear what would happen if the state sales tax passes and the Kansas City streetcar district fails with voters. Niec told the regional council’s transportation policy committee that the money allocated for the streetcar would simply be reallocated to other transit projects, but those projects have not been determined.

To reach Lynn Horsley, call 816-226-2058 or send email to lhorsley@kcstar.com.

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