Guest Blogger::Higher Sales Taxes are the Wrong Road for Topeka

The issue on the ballot next month isn’t a question of whether we should have better streets — who doesn’t want better streets? Certainly the business community would be among the first to say that properly maintained
streets are essential to their businesses and to attracting new ones.

The issue is whether or not a special sales tax should be levied on everyone to pay for a basic and essential service of city government.

The members of the Topeka Independent Business Association (TIBA), mostly small business owners from every kind of industry imaginable, were surveyed and overwhelming said NO to a sales tax. Are they saying they don’t want
better roads? No. Are they saying they don’t support Heartland Visioning? No. They’re just saying that a sales tax is the Wrong Road to fixing our streets.

1. Basic economic rules tell us that you NEVER raise taxes during a down-economy. And sales taxes, of all forms of taxation, is the most regressive. This tax harms the poor and older citizens on fixed incomes the most. We pay sales taxes on more than just food or clothes; we pay the tax on our water, telephone, electricity, and nearly every other purchase. Voting yes is a vote to take money out of the pockets of poor and senior Topekans. That’s the wrong road.

2. Topeka is already in the top 10% of all taxing districts in the state. If we increase our sales tax, we will be in the top 2%. This provides one more reason for shoppers, particularly those from out of town, to go to another community with lower taxes for their needs. How are the other 90% of taxing districts able to provide the services required, including good streets, with lower tax rates? Voting yes makes our community less competitive, and that’s the wrong road.

3. Proponents of the sales tax say that inflation has increased costs and we must therefore pay more for the services we demand. What they do not say is when costs rise, so do prices and the sales taxes we pay. Thus, the city has a built-in inflation hedge. And speaking of inflation, many economists are looking down the road at significant inflation due to the weakened dollar and the mass production of it as part of the government’s economic stimulus plan. The effect of spiking inflation and a higher sales tax will be very harmful to our local economy — another reason that voting yes is the wrong road.

4. Less than five years ago, Topekans voted to increase our sales taxes to pay for roads and bridges. Today we’re hearing the same arguments from those who want another sales tax increase. TIBA members believe good roads, like police protection, clean water, and sewers, are a fundamental purpose of our government. Therefore the city council should budget for these needs first and then either cut funding for other services or come to the voters to see if they are prepared to increase their taxes to fund the many other agencies that depend on city taxes for funding. Raising taxes to provide fundamental city services is the wrong road.

5. TIBA members are concerned that Topeka has experienced NO growth in the past 50 years. Topeka residents have tried a number of projects to turn this around including the Expocentre, TPAC, and a new airport terminal. What we have not tried is to reduce our taxes. In 1970, Topeka was one of the first three communities in Kansas to impose a sales tax. It was .5%. Until that time, we were able to pay for all city services, including road maintenance, without this additional tax burden. We believe our high taxes are a contributing factor to our stagnation. We believe that having Topeka recognized as a high-tax city is the wrong road.

6. The city has said that our streets require $30 million in repair work. An increase of .5% in our sales tax should bring in an additional $14 million per year for 10 years. This is 4-5 times the amount required for street repairs and is far more than is required. It could result in a budgeting dependence on this extra revenue. Funds currently allocated for street maintenance could be used for other, less pressing, purposes. At the end of 10 years, will the city council be prepared to fund normal street maintenance from other, existing revenue sources or is this a tax that will go on forever? Adding one more ongoing tax burden to the citizens of Topeka, and “bailing out” the city who has spent an enormous sum on golf courses, tearing out medians on Wanamaker that it had just installed, helicopters, and software, rather than fixing our streets, is the wrong road for Topeka.

I know that Topekans have too much common sense to raise taxes during a recession, one that could get worse long before it gets better. A sales tax increase is too risky, and the unintended consequences could be far worse for our community than the potential gain. Please, join TIBA members in voting NO for this sales tax increase.

kevin

Special thanks to Kevin Doel, our guest blogger, born and raised in Topeka and graduate of Shawnee Heights. He lived in Dallas for 5 years before returning home in 2000 to raise his kids. He started Talon Communications Group down in Dallas in 1998 and moved it here when he moved back. He started TK Magazine in 2006 to be a voice for the Topeka business community and showcase the entrepreneurial spirit of our city.  He is also a member of the Board of Directors for TIBA.

Last 5 posts in Guest Bloggers

  • Kevin, I don't think I could add much in the way of argument on this topic. Very well stated.

    I will add an anecdotal story, however - Chatham street by my house is very nice. It was recently repaved. Before that it was a little rough but it was still adequate. Also, the traffic was light and it kept speeds down. However, after the repaving, it has become a race track for idiots in tuner cars and for people looking for a shortcut through from 10th to Huntoon.

    During this time, and even now, I can't drive to my east office location on 29th and Adams without a 4x4 and getting to Walmart is almost dangerous because of the potholes. Why was my street "fixed" but these others left to languish? It's clear that the City has grossly mispent our money. The failed projects and salary debacles are myriad. Furthermore, there is no reason to trust that the City Council will not find a loop-hole or special memo process to direct this grossly over-funded account to some other crazy project from which they refuse to back away.

    Matt and Aaron, great commentary.
  • Dragoness
    Being the ubber nerd Im told I am I googled Save Our Streets. I was surprised to learn how many cities across the nation are currently running the same campaign. A good percentage of those also have river front projects in the works. I believe this is more than coincidence. The best voter is an informed voter. I voted NO!
  • Matt
    I have to agree. Now is definitely the wrong time to be taxing anyone. Instead, we should allow families and businesses (who also happen to be shoppers!) to keep more of the money that they earn.

    But, let's ignore the philosophical debate for a moment.

    First, let's ask the leaders and managers of the City: what are your priorities? What happened to the money we borrowed? And, now that it has been spent, why is it that we pay more to service our City's debt than we spend maintaining the roads?

    A very small portion, only about 12% of the city's budget is used for infrastructure. 14% pays for the debt. 24% pays for the "enterprise."

    Unfortunately, paying interest and principal on debt that was raised (for what exactly) is more important than maintaining the streets.

    Why?

    Secondly, why anyone contribute to the profligacy of the government that we have? By handing over more of our money, you are explicitly CONDONING the past misuse of the funds that they are entrusted with. I think that is something everyone should understand. It's like playing the enabler to an addict! Don't do it.

    According to what I can calculate from the city's 2005-2007 budgets, the city has spent about 15.5 million dollars on a variety entertainment type projects. While I agree that these are important for our quality of life, they are not necessities. 115k for a fence? 600k for two parking lots? 9.5 million to Heartland Park?
  • Matt
    I have to agree. Now is definitely the wrong time to be taxing anyone. Instead, we should allow families and businesses (who also happen to be shoppers!) to keep more of the money that they earn.

    First, let's ask the leaders and managers of the City: what are you priorities?

    Did you know that approximately only about 12% of the your tax dollars is used for public works (infrastructure, etc.)???

    Yet, did you know that City spends about 14% just to service its debt?

    Unfortunately, paying interest and principal on debt that was raised (for what exactly) is more important than maintaining the streets.

    Why?

    Secondly, why should I or anyone else contribute to the profligacy of the government. By handing over more of my money, I am explicitly CONDONING the past misuse of the funds that they are entrusted with.
  • Your family needs some food for the week. You ask a family member to go to store and get some milk, bread, and meat. You give that person $100.00. He goes to the store but returns with candy and soda.

    Do you say oh well here is another $100.00, please go back to the store and get the milk, bread, and meat. If so, when he returns with more candy and soda, what is your response?

    Do you continue to do the same thing until your family is completely out of money? Then what is your next move? Do you say to your self, well we are out of money and we need milk, bread, and meat so you go and get a second job to pay for those items.

    Now you are working 2 jobs and giving your family member $200.00 a week to buy milk, bread, and meat. Except he spends the entire amount on candy and soda. You can't figure out what the problem is, so you go and get a third job so you can buy milk, bread, and meat. You are now spending $300.00 a week on food, but you still have no milk, bread, and meat.

    Seems to me that just throwing money at the situation is not going to fix the underlying problem that the money is not being spent on what it is suppose to be spent on.

    Everybody loves the feel good items like candy and soda(TPAC, golf courses, and social services that are not even in the Government's job description), but if you aren't spending the money on the milk, bread, and meat (infrastructure, police, and fire) the feel good items won't be enough to keep the people who are the producers from leaving the city.

    To me, just giving more money to a person(city)who has proven to misuse it over and over again is not necessarily the most logical move.
  • Karl, Shanae answered your question well. Fixing the streets shouldn't require a new source of revenue. They need to prioritize the budget to fix the essentials first. If I neglect my office building's maintenance to the point that it's falling apart, I can't go to my tenants and tell them they need to pony up extra rent to cover the cost of repairs. Taking care of the building is an essential service that their normal rent payments should be covering. Now if they all get together and decide they want a deluxe patio added to the back of the building with a BBQ grill, then perhaps we should talk about increasing their payments each month to cover it.

    For those questioning the independence of TIBA, "Independent" is our middle name! I believe we have around 140 members, comprised of owners of various kinds of small businesses. And to my knowledge, Fred is not a member. I hope that's not the tactic that the other side will use to diminish those with opposing views...to call them names ("anti-Topeka" or "haters") or to try and associate them with Phelps. TIBA members have staked everything to build their businesses in this community and together are a major employer of Topekans.
  • First of all, I would like to thank our guest bloggers, Craig and Kevin, for taking the time to present both sides of the sales tax debate. Taking the time to write about this issue and knowing that comments will be made disputing your position is not easy, and I applaud these two gentlemen for offering to help us out. TransformTopeka's board is a diverse group, just like the community, and we do not all agree on this issue. We thought it best to present both sides to this issue and allow for positive debate to occur, just as was done with the Library Issue. Please make sure to keep this debate positive. We all will not agree, but need to be tolerant of others opinions. I ask that you steer clear of personal attacks and present solutions when you present a problem.

    As you all know, I have not concealed how I will be voting on April 7. I have made no efforts to hide it both with my Facebook and Twitter statuses and the sign in my yard. I will be voting NO and here is why.

    Yes, I want to see our streets in better condition. I am, however, voting no for a sales tax increase to fix them. I have reviewed the budget for this City on a few occasions and know that we have allowed a lot of wasteful spending and ill-prioritized spending. Maintenance of our infrastructure, police, and fire should always be a priority in the budget and the fact that we are spending money on other items while asking for money to address infrastructure leads me to believe that we have our budgetary priorities mixed up. The city (both Council and Management) need to sit down and address this by doing a zero-based budget. This word seems to be a buzz word flying around a lot with our current economic situation, but it is truly what should always be occurring. When we build our budgets at home we don’t take last years budget add 25% and call it good, but often that is what occurs within businesses and government. As taxpayers we should be appalled when the officials we have elected to manage our money do not assess each year’s budget starting from zero. Another thing that happens often is that a department will have surplus at the end of the year, but find something to spend that money on because they are afraid of loosing that money come budget time next year. I fear that this practice (very common in business) is also occurring within our City.

    I think before we, as a community, open up our checkbooks for our elected officials, we need to ensure that they are operating in an efficient and effective manner. I encourage all of you vote NO and then ask your Councilperson to go through zero-based budgeting.
  • Karl
    Kevin,

    What's the alternative to a sales tax increase? 75% of our streets are sub-standard. The city can't afford to keep up with repairs. We're in a rough situation, and we've got to fix it.

    Would you rather raise property tax? One of Topeka's most attractive features to potential home buyers is the low cost of living.
  • Kay Snead
    I agree that the Chamber might have its own agenda but when compared to the Topeka Independent Business Association they are far more independent and at the very least have a broader understanding of the desires and betterment of businesses in Kansas. They seem like they really have their finger on the pulse of what is best for the city. Good roads, more strong businesses, better city, and a vision for the future.

    Better than staying where we are forever, wouldn't you agree? I'll be voting yes for sure.
  • denise
    I'd also like to point out that TransformTopeka has offered two sides to this debate. Craig Gunther is a guest blogger for the sales tax. So please remember that this is a place for constructive discussion and not personal attacks.
  • The Chamber of Commerce is anything but independent, I don't believe that is a fair assessment of their position. The Chamber has its own agenda just as TIBA does. I happen to be a member of both the Chamber and TIBA, so I have had the opportunity to listen to both sides.

    Whether or not Fred Phelps is a member of TIBA is irrelevant to this conversation and is nothing more than an attempt to shine a bad light on TIBA by a negative association.

    The "right win" comment is also out of line. Anyone who knows me, knows I am anything but right wing, yet I am in TIBA. Do not let preconceived notions affect your reasoning. It is very easy to lump a group of people together as being the same, it is also unfair.

    Ken Daniels may not live in Topeka, but he does own a business in Topeka, along with many other business owners in TIBA.

    Are you saying Ken Daniels personally received $250,000 or TIBA did? I cannot comment on this, I have no knowledge of it.

    I also sit on the board of Transform Topeka, I don't appreciate being lumped together with "anti-topeka, old people (I guess I am old to some :) ), and haters". I am 33 years old, I live in Topeka, and I own a business.

    I do find it interesting that no one wants to dispute the 6 specific points that Mr. Doel made about sales tax and the way the current money that is collected is spent. Please dispute the points that are being made and leave any personal attacks and name calling out of the conversation. Let's keep it positive.

    I will be voting no.
  • Ally Klimkoski
    The thing is that Ken Danials - who runs the Topeka Independent Business Assoc - but the thing is he doesn't even LIVE in Topeka nor can he vote on it.

    But he received $250,000 in GO Topeka money and that's sales tax derived for some kind of economic investment dollars. Its ironic that he is opposed to this but is willing to accept $2500,000. If Ken opposes this ballot measure, maybe he should just give the city of Topeka back our money.
  • Catie Henderson
    I don't get why people are so anti-topeka - its has such potential to be a great city for my generation why do all of you old people have to be such haters?
  • Samson W Harris
    Just so you know the Topeka Independent Business Association has only about 100 businesses that are involved with it and is a right wing version of businesses owners including maybe even Fred Phelps's law practice. The Chamber of Commerce is an independent business organization that is nationally recognized as being pro-business. In Topeka there are over 1000 businesses involved in the Chamber.

    I'm not sure the Topeka Independent Business Association is a valid place to get any kind of information.
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