Work to rebuild U.S. 54 through Iola is still a ways off.
City Administrator Matt Rehder figures designs won’t be ready for another year, at the earliest.
But with the planning beginning to take shape, Iola City Council members are expected Monday to approve a resolution that would allow the city to issue revenue bonds worth up to $13 million.
The bonds would not be issued until designs are in place.
What happens up the road in Topeka in the coming days may loom large when talk comes to how to pay for those bonds — presumably sales tax revenue.
State lawmakers are slated to discuss the newest rendition of the “Ax The Tax” legislation that emerged from the State Senate in February.
The legislation would differ a bit from Gov. Laura Kelly’s long-sought goal to fully eliminate all state sales taxes on food and food ingredients by also taking away food sales taxes collected by cities and counties.
That would mean a significant hit to the budgets for both Iola, which has its own 1% sales tax levy, and Allen County, which has a 1.25% tax levy.
Rehder said losing food sales tax revenues would “definitely would be a big hit,” not only for the city’s highway project, but a number of other functions.
The proposed legislation is still a ways from becoming reality, if at all, Rehder quickly added. “I’d be surprised if it does.”
While the bill has emerged from the Kansas Senate to include the food tax prohibition to cities and counties, it must now go through the House of Representatives. The House Taxation Committee is slated to discuss the legislation Monday, before it would go to the full House for a vote, and would then have to be signed into law by Gov. Kelly.
“If it were to become law — and that’s a big if — we’d have some pretty lively budget discussions,” Rehder said. “That’s a long way off.”
Rep. Fred Gardner, R-Garnett, who represents Allen County, said he would have a hard time supporting such a proposal.
“I’m not anxious to take the taxing authority away from the local entities that have that taxing authority now,” said Gardner, who told the Register he had not yet read the Senate’s bill.
Gardner also had questions about removing the food sales tax levy any quicker than had already been approved.
In legislation approved last year, the Kansas food tax levy went from 6.5% to 4% this year, and will drop further to 2% on Jan. 1 2024 before being wiped off the books altogether in 2025.
