Overland Park sales tax revenues rebound slightly — but stay well below projections used for 2020 budget

Roxie Hammill - August 6, 2019 11:00 am
Sales tax revenue is notably off from last year, prompting concerns from Overland Park officials as the council considered next year’s budget.

Overland Park sales tax collections — which have been worryingly low so far this year — improved last month, City Manager Bill Ebel said last night. But they are still far below the projected 2 percent growth assumptions on which the next city budget is based.

Mayor Carl Gerlach made note of a better sales tax report just before hearing public comments on the proposed 2020 budget Monday. Council members and staff have been closely watching sales tax figures, which have lagged mysteriously for the first half of this year.

Far from growing by 2 percent, the sales tax remains in negative territory. The newest numbers put it about 5 percent behind the same time last year. Still, that’s better than the negative 6 percent from a previous report, Ebel said. City officials have hoped to see the sales tax revenues pick up as the year progresses. If not, adjustments may have to be made in the $304.8 million city budget. Sales tax, plus a steady 13.566 mill levy rate and fees support the budget.

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Sales tax is collected by the state and distributed to the cities. Since there is about a two-month lag before the money reaches the city, officials have wondered if the low numbers this year could have been due to a glitch in collection or reporting. The latest update shows the city got $19.1 million in sales tax for the first five months of this year, compared to $20.1 million in last year.

Former Kansas Rep. Charlotte O’Hara, who ran against Gerlach for mayor in 2017, expressed concern over the sales tax during the comment period, wondering aloud if the use of special sales taxing districts is taking a toll on revenues in the area. “I understand why developers request the (sales tax incentives) but perhaps it is a wrong type of policy that we have developed in Overland Park,” she said.

“This is serious. This is very serious and I think it is something that has to be diligently studied and we have to come up with a plan to see if we can at least turn this around and stop the erosion of our tax base,” she said.

Councilmember Fred Spears said that because of the amount of retail in Overland Park, it’s difficult to achieve even a percentage point or two of growth. Gross sales in the city have topped $3 billion, he said. He and some other council members noted that cities with less retail don’t have to increase as many dollars to get a percentage point gain.

Gerlach admonishes speakers about comments not related to budget

Mayor Carl Gerlach. File photo.

Five people came to the podium during the public hearing, which was the last before the budget is adopted. Four of the five were warned or cut short by Gerlach, who said their comments were too far afield of the proposed budget the hearing was supposed to focus on. He warned Sheila Albers to stick to the budget when she began talking about mental health responders. Albers’ son, John, was killed by Overland Park police in 2018 as he slowly backed the family minivan out of the garage. Officers were responding to reports that he threatened suicide.

Since then Sheila Albers founded JoCo United to try to improve mental health response. She encouraged the city to continue to support and add to training for responders.

Three other speakers were cut short after Gerlach said they were straying from the central budget theme. Cynthia Yin said she’d like to see the city be more “cutting edge” on environmental sustainability issues, perhaps by adopting 2018 international green construction code.

Two other speakers, Corey Brunk and Johnson County Community College trustee candidate Cassandra Peters of Olathe urged the council to adopt an LGBTQ non-discrimination ordinance. Such an ordinance would encourage diversity and economic growth, Peters said. Overland Park has not adopted a non-discrimination ordinance of its own, though the council backed one being considered at the state level.

Gerlach said any new ideas should have been brought up at the two earlier public hearings the council held as the spending plan was developed in committees. The hearing Monday was supposed to be about the most recent budget iteration, he said, because that was what was published in the agenda.

Talking about items not on that budget would be “illegal,” he told the speakers, though he did not quote a specific ordinance that would be violated. Later Gerlach explained that allowing comments on issues not directly included in the budget wouldn’t be fair because the published agenda said the hearing would be about the budget.

“If people want to get up and talk about things that aren’t published it’s not fair to the rest of the people who look at our agenda to see something’s published,” he said.

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