Archive for Thursday, March 11, 2004

Excise tax hoped to balance developers’, taxpayers’ needs

City Council expects to get developers’ input next month

March 11, 2004

Although Council members are fairly certain what developers will have to say about a proposed excise tax on new construction, the Eudora City Council will give them a chance to do so at an upcoming meeting, likely in the first part of April.
"We have to listen to these people," said Council member Tom Pyle. "They're bringing business to this town."
The Council discussed an excise tax proposal the city administrator based on what other surrounding communities were doing to pay for transportation improvements made necessary by increased population.
An excise tax assesses new development and new or expanding construction on existing lots by the square foot. A survey of surrounding communities with excise taxes shows a range from a soon-to-be 21.5 cents per square foot in Shawnee to just 5 cents per square foot in Tonganoxie. Some surrounding communities like Lawrence and Baldwin City don't have excise taxes.
Such taxation was a double-edge sword, said City Administrator Mike Yanez. Although more Eudorans added strain to transportation infrastructure, he said it "may also send a message to developers that it's a little harder to build here."
The Council raised the issue that unlike Eudora's larger Johnson County neighbors, the city wasn't at the point yet where it wanted to slow growth. Moreover, the recent increases in other construction-associated fees made it important to keep the rate moderate.
Although Council member Scott Hopson had previously said he'd rather see developers pay for necessary transportation upgrades than Eudora taxpayers, Hopson said he also saw the importance of striking a balance with developers' needs.
"We have to find a common ground for this to work," he said. "We don't want to stop growth. We've all got to he happy with this."
Pyle agreed the rate needed to be moderate but conceded the added revenue would benefit the city.
"The city of Eudora is like any business," he said. "We're in it to make money to provide services to our citizens."
That's why the city collected money for electricity, water and other services, he said. Fellow Council member Don Durkin asked whether excise taxes could help finance the strain population growth added to utilities.
However, Yanez said those services were "enterprise funds," and increased user fees helped offset infrastructure improvements. Moreover, combining tax revenue with user fees could get tricky.
All surrounding communities use their excise tax money for transportation, which includes not only roads but also sidewalks, bike/pedestrian trails and storm water infrastructure needed for large roads.
It is hoped cavaets included in the proposal it is hoped with find middle ground with developers. They include a possible two-tiered tax rate that would provide a cut for large-lot development.
"I'm afraid (without it) developers would then be encouraged to crowd small lots in all the subdivisions," Yanez said.
Developers would also be given credit for public improvements, such as parks or playground equipment, or developers' improvements to adjacent streets.
The proposal would also provide an exemption for subdivision plats the city was reviewing before the tax was instituted. Although an excise tax could take effect as soon as 60 days after publication, Yanez suggested the Council could set a specific date, such as July 1, that would allow developers to begin the platting process with the city before the tax took effect.

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