Archive for Thursday, April 15, 2004

Questions remain to be answered on excise tax issue

April 15, 2004

Unable to decide how -- or even whether -- an excise tax should be instituted in Eudora, the Eudora City Council again tabled the issue after Monday's meeting. It was suggested getting members of the community together to discuss how the city should deal with an excise tax.
At the meeting, the Council heard from two area developers as well as Bobbie Flory, who is executive director of the Lawrence Home Builders Assn. Flory said the numbers suggested for an excise tax -- 16 cents per square foot on smaller homes and 12 cents on larger ones -- were arbitrary and didn't take into account the impact fees that made building in Eudora different from other communities. Flory suggested a subcommittee of citizens to discuss a fair balance for an excise tax.
She also said homebuilders were concerned that even though the city would collect taxes with the intent to use them for transportation improvements, the city was not legally bound to do so.
Mayor Ron Conner said the intent was for money raised to improve major roadways like Church Street that benefited everyone in Eudora, not to repair small neighborhood streets.
Meadowlark developer Brett Fritzel said an unadressed problem with excise taxes was the fact developers could be borrowing money to pay them, meaning the cost to developers would not only be the amount of the tax itself but also the interest on the loan with hopes of still making a profit.
Moreover, Council member Tom Pyle said an excise tax also meant when that cost was passed on to homeowners it would be part of their mortgage, meaning they, too, would be paying interest on the tax.
One of the questions Conner said he had about the proposal was how it would affect infill development, which the city seems to want to encourage. On one hand, City Administrator Mike Yanez said homes built on empty lots in the city's center still added residents who put wear-and-tear on the city's roads.
On the other hand, City Council member Scott Hopson said he feared excise taxes would make smaller starter homes likely to be built on the older part of town's smaller lots unaffordable to those who would be buying starter homes.
To legally treat one group different from the other, City Attorney Jerry Cooley said, the city would have to make a reasonable argument. Cooley said the fact newer subdivisions had marketing whereas infill development didn't could be such an argument.
It was generally agreed that more commercial and industrial development would help Eudora pay its infrastructure costs. But Yanez said developers' focus in Eudora so far had been residential.

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