Mission looking at new options in fees, property tax, sales tax to cover budget gaps

Mission_City_HallA new proposal to plug gaps in the 2016 Mission budget would add more of an increase to the stormwater fees and lower a proposed property tax increase. But the city council has not completely signed off on the new idea.

Mission is facing a revenue shortfall of approximately $500,000 per year in its stormwater debt service, largely due to general fund revenues that have been diminishing over the last several years. It also faces a loss of approximately $775,000 in its street maintenance fund as a result of the ruling by the Kansas Court of Appeals that held the city’s Transportation Utility Fee (TUF) to be illegal. The council voted Wednesday to appeal that decision to the Kansas Supreme Court.

At the last budget session, the city had considered a property tax increase of seven mills to cover the loss of TUF funds and a $2 per month increase in the stormwater charge that would partially offset the street maintenance loss.

At a public hearing Wednesday night, the new budget proposal included a property tax rate increase of only 4.5 mills, but a stormwater fee increase of $5 per month for a single-family residence. The stormwater increase would be expected to generate $450,000 per year to mostly cover that deficit. The mill levy increase is expected to generate another $535,000 that will partially offset the loss in street funds. The city also would defer $220,000 of capital requests.

The newest proposal acknowledges that a gap still exists in the street fund. Part of the proposal includes the possibility of adding to the city sales tax to put more money into street maintenance. A quarter-cent increase in sales tax would yield about $550,000 and the city could go as high as an additional three-eights of a cent. However, it would take six months to get a sales increase on the ballot for voter approval.

“This plan won’t work for the future if the sales tax doesn’t pass,” said Mayor Steve Schowengerdt. Councilors Amy Miller and Dave Shepard both raised the possibility that the 4.5 mill increase in property taxes is not sufficient to cover the street needs.

Early results from a citizens satisfaction survey showed substantial support for street maintenance as a city priority.

Miller cited the survey results to say that, even with the sales tax, there won’t be enough money to cover the street needs. Mission also is still quantifying the cost of several streets that need full-depth replacement.

“I don’t think four and one-half (mills) goes far enough,” Shepard said. “We have to keep investing in our community …. I don’t want to lose the momentum.” Shepard said he would support the proposal if necessary, but said, “I would rather do something courageous now. When we invest and build, good things happen.”

Miller and Shepard pointed out that the city has a low property tax rate and a higher sales tax rate compared to area cities.

“I hate to burden our residents,” Schowengerdt said. A chart on the new proposals showed a typical $150,000 home would pay $77 additional per year from the property tax and $60 per year from the stormwater increase, but save $72 per year from the elimination of the TUF. That leaves a net increase of $65 per year or $5.47 per month under the latest proposal.

Councilors asked for more scenarios on increases in the various rates.