Northeast Joco

August 20, 2013

Roeland Park develops plan to cope with loss of Wal-Mart revenue

Council members voted last week to raise property taxes for 2014 and to ask voters to approve an increase in the city’s sales tax,

It’s taken months of city staff and town hall meetings. Now Roeland Park leaders have finally decided what to do about the huge hole a departing Wal-Mart store will leave in their budget.

Council members voted last week to raise property taxes 26.5 percent for 2014 and to ask voters to approve a .35 percent increase in the city’s sales tax, with the hope that if the sales tax passes, some of the property taxes could be rolled back.

The city also cut some services, most notably in the police department. The deputy police chief position will be left unfilled next year and in 2015.

The council approved the two measures 5-3, with Becky Fast, Robert Meyers Jr. and Mel Croston voting against both. Supporters of the two measures said it was the best they could do to fill the void that Wal-Mart will leave in 2015, when it will close the Roeland Park store and open another at the Gateway development a few blocks away in Mission. That move is expected to cost the city $700,000 a year in lost tax revenue.

But opponents said the increase was too steep and that the city didn’t do enough to cut its spending. They were also wary of supporters’ assertions that big increases now will keep the city from having to raise taxes again in the next two years.

The property tax increase, effective Jan. 1, will amount to about $114 more per year or $9.50 more per month on a $130,000 home in Roeland Park, said City Administrator Aaron Otto.

The sales tax proposal will be mailed to residents in November and should be returned in time to reach the elections office by the Dec. 10 deadline, Otto said. The .35 percent additional tax would be effective for five years and would raise about $288,000 per year once Wal-Mart leaves. The tax could draw higher revenues in the months it is effective before Wal-Mart leaves.

The increase would bring the sales tax range in Roeland Park to 8.975 to 9.975 percent, depending on special taxing districts. Of that, the city would collect 1.55 percent.

Roeland Park residents weighed in this summer in town hall meetings about the budget situation. Some supporters and opponents of the tax increase agreed that most people at the meetings would have accepted at least a small increase in taxes to keep the city from shutting down many of its services.

However, some council members said the increase was too big and that that city should have tried harder to make cuts before asking for two tax increases.

“The residents I heard from said to have both is too much, it’s over the top,” Fast said.

She said the increase is more like 34 percent when it’s compared to a year ago. Fast also objected to the increase in the city’s reserve fund. The council increased reserves to 27 percent when general accounting principles say 16.7 percent is needed, she added.

Croston, who also voted no, agreed. “We as a city council did not work hard enough,” to find other cuts, she said.

But Councilwoman Jennifer Gunby, who supported both measures, said there were significant cuts in city spending. Besides the deputy chief position, the city will spend much less on street maintenance, opting for short-term repairs that will cost less. The city projected spending $200,000 total for street repairs over the next three years.

“If I had a choice I wouldn’t want a sales tax or a property tax increase,” Gunby said. “But you have to fund the budget from somewhere.”

Gunby said the intention was to have this year’s big cut keep the budget stable for the next three years.

Gunby said that the sales tax could help residents out of the property tax bind, because it might allow the council to roll back property taxes or reinstate services lost. The sales tax is paid not only by residents but by shoppers from outside the city limits, so would be a more palatable way to raise funds, she said.

Both Croston and Fast voted against putting the sales tax before the voters because it would go into the general fund. The sales tax should have been earmarked for a specific purpose, such as to bring down the mil levy, they said.

“It felt like a blank check,” Fast said.

Roeland Park residents defeated a larger sales tax increase last November by 36 votes. The city’s ongoing budget crisis attracted at least 100 people to a recent town hall meeting. The action last week was the final one before the 2014 budget goes into effect.

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