Archive for Thursday, March 25, 2004

Excise tax discussion on hold

City Council tables 16-cent proposal

March 25, 2004

An excise tax that would charge new construction for transportation upgrades made necessary by added population isn't going anywhere for the time being. After continuing discussion of the tax Monday night, the Eudora City Council tabled the issue until all Council members would be present.
A draft from City Administrator Mike Yanez proposed assessing lots smaller than 10,000 square feet at 16 cents per square foot, with larger property owing just 12 cents per square foot. It was hoped the different assessment rates would encourage developers to build larger lots in Eudora.
Yanez said he arrived at the number arbitrarily by looking at excise tax rates at surrounding communities, which ranged from 5 cents in Tonganoxie to as much as 21.5 cents in Shawnee.
Some Council members, like Tom Pyle, said 16 cents was "out of line" for Eudora. Fellow Council member Scott Hopson said he worried that an excise tax would slow growth in Eudora.
Yanez said many city managers and administrators had heard that same argument when their cities talked about excise taxes, but that didn't mean it slowed growth. He also said it was important to look at the numbers and avoid making an emotional decision.
"We're putting too much back on the city at large," he said.
Mayor Ron Conner asked engineers what the exact cost of adding roads would be and how that broke down to the square foot. City engineers said too many variables prevented them with coming up with a number on the spot. However, Yanez said De Soto, at 19 cents per square foot, was the only surrounding city he knew of to set its excise tax with such a calculation.
Because the proposal would charge a higher rate for lots smaller than10,000 square feet, Hopson said he didn't want to see people penalized for building on infill lots in the older part of Eudora.
Brett Fritzel, a local builder who has built the Meadowlark development, said even though a reduced cut for large-lot development would benefit his homes there, he didn't think it was fair to builders in other developments, like Shadow Ridge.
"It's not fair to them, either, to let me have a lesser rate and them a higher rate," Fritzel said.
Although Fritzel had concerns with an excise tax, he said he supported a solution to growth problems that would be good for everyone. For instance, he said he wouldn't mind paying higher building permits.
"I'm adamant not to tax one group that's good for growth in the city," he said of developers.
Not only would an excise tax slow growth in the city, Fritzel said the increased cost would affect the future home buyers, a group not yet formed or able to give their opinion.
Moreover, Fritzel said a 16-cent or higher excise tax could give him diminishing returns on the cost of the land and would discourage farmers and other landowners from selling their land.
"If they have this happen, it takes my family's livelihood away," he said. "I do like living in Eudora. I picked to live here."

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