K.C. Votes on Sales Tax Hike

Voters in Kansas City, Kan., will go to the polls today to decide on an increase in the local sales tax from the current 7.55% to 7.925%.

It is expected to generate an additional $6 million a year. Actual revenue is pegged at $8.3 million, but more than $2 million from dedicated districts is earmarked to debt service on existing sales tax revenue, or STAR, bonds.

The increase would boost the sales tax on a $100 purchase by 38 cents. If voters approve, the tax would expire in 10 years unless it is renewed before then.

Officials of the Unified Government of Wyandotte County/Kansas City said the additional revenue would protect the police and fire departments from budget cuts, and provide funds for street repairs and neighborhood improvements.

Mayor Joe Reardon said last week that the tax hike would compensate for the loss of millions in local taxes as well promised state funds that have been curtailed by Kansas’ budget problems.

A drop in local property values will reduce property tax revenues by $8.1 million in fiscal 2011, he said, and sales taxes are expected to be down by $2.2 million.

In addition, Reardon said, the unified government has lost $5.6 million a year with the elimination of the state tax on machinery equipment. Without that revenue, he said, property taxes would go up and some services would be eliminated.

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