Iolans to decide whether to extend city sales tax
It’s not a stretch to say the most important vote for Iolans on Election Day may have nothing to do with who becomes the state’s next governor, our next representative in Congress or who gets a seat on the Allen County Commission.
When Iola voters head to the polls, they’ll be asked to extend the citywide half-cent sales tax that’s been in place since 1989.
Revenue from the tax has been used for major street projects and repairs, other capital projects, such as sidewalk replacement and trail extensions, and since 2012, to help pay for construction of Allen County Regional Hospital.
“It’s important to note that approval of the sales tax extension would not increase the sales tax in Iola,” City Administrator Sid Fleming said. “It’s the same tax they’ve paid for nearly 30 years.”
The existing sales tax rate runs through 2019.
“We’re a little early (in putting the referendum back before voters), but we just thought we’d like to get it out and done, and hopefully we’re successful,” Fleming said.
THERE ARE some big-ticket items hanging in the balance of the Nov. 6 vote, most notably a full rebuild of Madison Avenue, from McDonald’s on the west edge of town to Jump Start Travel Center on the east.
While acknowledging a better look at the project’s cost wouldn’t be available until an engineer’s study is complete, Fleming expects the price tag to land in the $8 million range, or more.
Because of a recent change in how the federal and state governments provide assistance to municipalities for road projects, Fleming doesn’t expect much outside funding.
“There might be other options out there,” such as some sort of financing plan, he continued, “but honestly, if we’re going to get Madison done, the sales tax vote will have to be successful.”
The other interested party in the upcoming ballot initiative is the hospital.
Allen County voters approved a quarter-cent sales tax in 2010 to help pay for ACRH’s construction, a figure made possible after Iola city commissioners agreed to hand over half of its half-cent tax revenue — roughly $300,000 annually — to pay off construction bonds.
Trustee Patti Boyd told the Register this week the hospital plans to reach out to the city once again — if the sales tax is extended beyond 2019.
If Iola voters say yes to the extension, the decision to continue supporting the hospital rests with Iola City Council members.
THE SALES tax has been approved by overwhelming margins in 1989, 1995, 1999 and 2008. The most recent extension in August 2008 was supported by 78 percent of the voters.
Fleming suspects part of the local support comes in realizing the revenue comes from not just Iolans, but outof-towners who come to Iola to buy groceries, gas or other merchandise.
All told, Iolans are taxed at an 8.75 percent rate, including 6.5 percent for the state, 1.25 percent for Allen County and 1 percent for the city. (The additional half-cent from the city’s sales tax rate goes to the General Fund, and does not sunset.)
For comparison’s sake, Chanute’s sales tax rate is 9.5 percent, Humboldt, 9 percent, Fort Scott, 9.4 percent, Garnett, 8.5 percent, and Pittsburg, 9 percent.
Fleming also pointed to the sales tax’s consistency as a revenue stream. Sales tax revenue since 2012 has varied little, usually within $50,000 from one year to another, aside from 2014, when it spiked an additional $100,000, largely believed to be have been tied to the number of construction workers connected to the En-bridge Pipeline project. For the better part of a year those workers purchased food and clothing in Iola, and stayed in its motels or RV parks, boosting the town’s sales tax income.
Past projects supported from sales tax revenue include full rebuilds of Lincoln, Kentucky and Cottonwood streets, supplementing state funding to extend the Prairie Spirit and Missouri Pacific walking and biking trails through Iola, replacing the Jefferson Avenue bridge over Coon Creek, doing infrastructure work to accommodate construction of the Cedarbrook subdivision; and resealing a number of parking lots.
Other, smaller street repair projects also have been funded locally, added Assistant City Administrator Corey Schinstock.
Fleming is uncertain such an ambitious list is possible today, even if the sales tax is extended, because of the lower state and federal funding levels.
“When it comes to infrastructure dollars, much of the federal money is tied to water and utilities,” Fleming said. “The roads have been getting pinched. It seems like a lot of federal and state money is getting harder to get.”
There are plenty of street needs in addition to Madison. Schinstock spoke of a desire to add curbs and guttering along all of North Kentucky Street to accommodate heavier traffic to the hospital on top of other repairs.
AS AN aside, the sales tax revenue also allowed the city to make a $626,000 bond payment this year related to construction of the city’s water plant because the water fund was insufficient.
City Council members have since then approved a 10 percent water rate hike, scheduled to take effect Jan. 1, although Fleming contends other rate increases will be needed to further stabilize the water fund.
“My goal is, once we get water rates where they need to be, the water fund will pay the $626,000 back into the Capital Projects Fund,” he said.
Making the water plant payment from Capital Projects left the fund with a balance of about $700,000.
County announced in a press release earlier this month that sales tax revenue is up across Allen County in 2018. The press release attributed Iola’s higher revenue in part to the opening of G&W Foods and Dollar Tree.
Fleming confirmed sales are up in Iola in 2018, but cautioned against anticipating higher revenues on a regular basis, noting sales tax revenue fluctuates from month to month.