WHAT went wrong?
The Lyon County Commission proposed a 1 percent sales tax to be used to reduce property taxes. The county’s voters approved the tax just a few weeks ago.
Now the Kansas Department of Revenue says it will not collect the tax. Why not? Because the tax resolution, in some way — nobody is being very informative about this — is not in accord with state law. The attorney general has given his opinion that the department of revenue is right.
The county has already made its 2009 budget relying on the expectation that, beginning Oct. 1, it would start getting revenues from sales. Now it is likely that it will be months before the tax can be collected. It is clear that the county will be scrambling for much of the fiscal year to make ends meet.
The people of Lyon County have little choice but to assume that their government has made a big mistake. They are within their rights to ask what the mistake was and how it came about and to get clear answers.
So let us ask again:
What went wrong?
Patrick S. Kelley
Editorial Page Editor
dale011 (anonymous) says...
Could it possibly be that their legal counsel is really not as good as they would wish?
August 21, 2008 at 4:40 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
dale011 has a point. This should not have been a surprise like this. If I understood the article yesterday correctly, the problem was that the governing statute prohibits a county from imposing more than 1% in sales tax. Since the courthouse tax takes 1/2% already, that only leaves an additional 1/2% that can be legally imposed. One would think that legal counsel would have caught that.
August 21, 2008 at 4:51 p.m. ( permalink | suggest removal )
hickory (anonymous) says...
Patrick.......publish the statute and you will see.KVOE has it on their website. It doesn't say anything about a cap for county sales tax.........just city
August 21, 2008 at 4:56 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
hickory: You are incorrect. Here is the statute:
The rate of any city retailers' sales tax shall be fixed in increments of .05% and in an amount not to exceed 2% for general purposes and not to exceed 1% for special purposes which shall be determined by the governing body of the city. For any retailers' sales tax imposed by a city for special purposes, such city shall specify the purposes for which such tax is imposed. All such special purpose retailers' sales taxes imposed by a city shall expire after 10 years from the date such tax is first collected. The rate of any countywide retailers' sales tax shall be fixed in an amount of either .25%, .5%, .75% or 1% which amount shall be determined by the board of county commissioners…(exceptions not listed).
Note the last sentence: No countywide sales tax can be more than 1%. It seems pretty clear to me. Since we already have the courthouse tax as a countywide 1/2% sales tax, that only leaves 1/2% that can be legally imposed.
August 21, 2008 at 5:03 p.m. ( permalink | suggest removal )
USNretired (anonymous) says...
What a circus! Send OUT the clowns. They have been in too long now.
August 21, 2008 at 5:17 p.m. ( permalink | suggest removal )
hickory (anonymous) says...
jayhawker......it doesn't say anything about "not to exceed" a certain percent for county sales tax. So, the way I read it, the county can have a sales tax of .25% and another one for something else at 1%, because it doesn't say "not to exceed" 1%. The city can have sales tax in different increments, but they can't exceed 2%.
August 21, 2008 at 5:34 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
hickory: Note that the statute says that a countywide sales tax "shall be fixed in an amount of EITHER .25%, .5%, .75% or 1%" (emphasis added). I don't see 1.5%, which is what the Lyon County rate would be if this tax were imposed. I think that what you are suggesting is that since this tax election was only at 1%, then it should be acceptable. However, that is an unreasonable reading of the statute, since that would allow a county to impose 1% at a time to add up to a much greater rate. That is not a reasonable interpretation, and not one that either the Kansas Department of Revenue or the Kansas Attorney General adopted. Let's face it - the County Counselor let the commission down on this one.
August 21, 2008 at 5:47 p.m. ( permalink | suggest removal )
hickory (anonymous) says...
You see jayhawker, we both read it differently. When it says that it shall be fixed in a certain amount.......the way I read it, is that when you have an election on a sales tax, that it has to be fixed at 1/4 increments......you can't have it 33% or 28% or what ever. And please note that it doesn't say anything about "Not to Exceed". The state has been in this situation before from other counties and they were suppose to change the wording 2 or 3 years ago and never have.
August 21, 2008 at 6:09 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
I understand what you are saying, hickory. However, you have strengthened my point if this has come up before. That further means that the County Counselor should have been on notice that there was a problem. If the state has denied other counties in this situation, I'm not sure why we would think that they would not do so to us.
August 21, 2008 at 6:15 p.m. ( permalink | suggest removal )
hickory (anonymous) says...
forgot the decimal points in front of the 28 and 33
August 21, 2008 at 6:15 p.m. ( permalink | suggest removal )
hickory (anonymous) says...
The other counties had to go through the legislature too, but finally got it. That's why the legislature was going to change the wording,because they knew it could be interrupted either way, so the counties aren't wrong on the interruptation, if the legislature can't decide which is right. I bet they change it next year tho.
August 21, 2008 at 6:35 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
Again, hickory, if other counties had had to get special legislation, that means that the governing statute has been consistently applied in the way that it is being applied to us. Why, then, were we surprised by this? Somebody dropped the ball.
August 21, 2008 at 6:44 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
You are well informed on this issue, hickory. What can the county do now to replace the revenue that will be lost because, at best, this sales tax will go on line in an untimely manner? Correct me if I am wrong (because I'm not sure on this), but I think that it is too late to up the property tax to replace that revenue. Additionally, it would be a shot in the dark to say how much revenue would need to be raised by the property tax in any case because of the uncertainty over the sales tax and its effective date. This will also impact all of the municipalities in the county inasmuch as each of them have budgeted assuming revenue from the disputed sales tax. If you know what the options are now, would you share with us? This is a very serious matter with far reaching consequences. You truly seem to be the only person that I have heard from that seems to know what is going on here.
August 21, 2008 at 6:54 p.m. ( permalink | suggest removal )
hickory (anonymous) says...
I'm not sure what the county can do, since they've already approved their budget. I think they can take money out of their reserves or borrow the money and pay it back with the sales tax money, when they get it. The city hasn't approved their budget yet, so they can still make cuts in their capital improvement plan and cut anything else they want to cut. I'm not sure about the county tho. I think the county can cut funding, but they aren't allowed to raise it. It's going to be interesting.
August 21, 2008 at 7:17 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
KVOE's website has a discussion about this issue. It said the same things that hickory said about what local governments can do now in light of this situation.
I looked at the entire statute, and there have been a number of counties that had to get special legislation on this over the years, some of them more than once. Here they are:
Osage, Reno, Cherokee, Crawford, Ford, Saline, Seward, Wyandotte, Anderson, Barton, Ottawa, Marion, Linn, Finney, Ford, Dickinson, Miami, Sherman, Crawford, Russell, Franklin, Douglas, Jackson, Sedgwick, Neosho, Saline, Harvey, Atchison, Wabaunsee, Jefferson, Riley and Johnson (32 counties out of 105).
The relevant statute lists them and the exact exceptions made. I don't know how our county could have overlooked this if the County Counselor looked at the statute at all. It is so obvious, in fact, I wonder if he either didn't look at it, or the commission did not request his assistance in the matter.
August 21, 2008 at 7:48 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
Since Emporia placed so many of its eggs in the Sales Tax basket, I am surprised that the City Commission didn't ask the City Attorney to look at this as well. I bet that they do from now on.
August 21, 2008 at 8:23 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
I know that this is ancient history, and some will not want to revisit the matter. However, it is a fact that none of this would have happened if we had not imposed the courthouse tax in 1999. I know that we could not then see the disaster that our economy would become, but it is worth noting that in good times, as in bad, our local government should never spend lavishly or wastefully, as it did then. We did need a new courthouse, but not one with all the opulence, grandeur and frills. Instead of excessive spending on aesthetics, we should have made sure that the floors would not have to be replaced in 6 months and the roof would not leak in 6 years. This is Kansas. The traditions of our fathers and grandfathers were to build elegantly, but simply and practically, and never build monuments to other's egos with tax (other people's) money. If our leaders had observed those long standing practices at the time, we would have a nice, practical (and paid for) courthouse, putting us in better stead to deal with these troubled times. The next time that we are pitched to buy a bill of goods from those with self serving interests, we all need to remember 1999, the year that our leaders had not the courage to say "No" to the snake oil salesmen.
August 21, 2008 at 11:17 p.m. ( permalink | suggest removal )
MrCmonkeeDo (anonymous) says...
Bravo Jayhawker!
August 22, 2008 at midnight ( permalink | suggest removal )
jayhawker (anonymous) says...
Mr. Kelley: Since I often take issue with you, I want to point out how well reasoned and persuasive your points were in this editorial. Thank you.
August 22, 2008 at 12:49 a.m. ( permalink | suggest removal )
Doug (anonymous) says...
I don't remember the "NO" option. It was either increased sales tax or increased property tax but we were getting the courthouse like it or not.
August 22, 2008 at 4:43 a.m. ( permalink | suggest removal )
ghost (anonymous) says...
look closer-county counsel advises, commissions take action...based on maybe advise given last year??
August 22, 2008 at 4:53 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
ghost: What are you trying to say? That the County Counselor gave the bad advice to the Commission a year ago? And the point would be?
August 22, 2008 at 9:40 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
Doug: You help make my point. It was our elected leaders who bought the snake oil. We only got to decide how to pay for it. The elected leaders should not have turned that whole process over to an unelected branch of government that became hogs at the trough, allowing the rest of us to pay for it.
August 22, 2008 at 9:43 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
Los Angeles started off with a smoking ban, officially because the smoke was bad for the health of its citizens. Now, it has banned fast food restaurants in parts of town, officially because fast food was bad for the health of its citizens. Remind you of anything? We tried Prohibition once. We found out that squeezing a balloon in the middle makes it pop out on the end. Are we headed back to the time of "speak easys" where people hide from the police to have a hamburger and a cigarette?
August 22, 2008 at 10:02 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
Sorry. The last post was posted on the wrong thread.
August 22, 2008 at 10:05 p.m. ( permalink | suggest removal )