DALLAS - Voters in Wichita, Kan., will decide on Nov. 4 whether to add 1-cent per dollar to the city sales tax to raise $400 million over five years for civic projects and a jobs program.
The sales tax would provide $250 million for an underground water storage system, $27.8 million for street maintenance, $39.8 million for transit and $80 million for job development.
If approved, the sales tax would be the first for the city. Wichita residents pay a 6.15% state sales tax and a 1% county sales tax. The city sales tax, if passed, would raise the total sales tax for Wichitans to 8.15%.
Under the ballot language, the city is required to end the tax once the $400 million is collected. The language also requires the city to use the money only for the particular projects that are listed.
A Sedgwick county 1-cent sales tax to build a performance arena ended in 2007 after raising $206.5 million for the project, officials noted.
Wichita receives about 58.43% of Sedgwick County's 1% sales tax. About half of the city's share of the county-wide local option sales tax is dedicated for capital projects and the other half for property tax relief.
Property taxes represent the city's largest general fund revenue source, at 40.5% of fiscal 2013 general fund revenues. Franchise fees make up 18.7%, and sales tax revenues provide 13%.
The jobs program is considered the most controversial proposal, according to the Wichita Eagle. The city's goal is to create 20,000 jobs in the next five to seven years.
About $32 million, or roughly 40% of the new funding would go toward Wichita State University's new innovation campus, road and sewer projects and others designed to increase employment.
Another 40% of the jobs funding would go toward workforce training, including retraining for production workers and grants to local colleges and training institutions.
About $16 million or 20% of the job funding would be used to offset business costs for moving or expanding locally or investing in Wichita research projects.
The Wichita region lost 13,000 of its nearly 38,000 aircraft manufacturing jobs between 2008 and 2010. The numbers do not include jobs in businesses that are dependent on aircraft manufacturing. More recently, in 2013, Boeing closed its defense plant in Wichita citing cuts in federal defense spending.
"Wichita's greatest economic challenge remains in the concentration of its employment base, which is dependent on the aircraft manufacturing industry," according to Moody's analyst Tatiana Killen, who rates the city's general obligation debt Aa1 with a stable outlook.
Standard & Poor's rates the city's GO debt AA-plus with a stable outlook.
