About the Sales Tax Increase

On April 20, 2016 the Saline County Clerk’s Office mailed to Salina voters a sales tax election ballot. It asked voters to replace the City of Salina’s current 4/10th (.40%) cent capital improvement sales tax with a 3/4th of a cent (.75%) capital improvement sales tax for a term of 20 years.

The sales tax increase was approved. The rate will change from 8.4% to 8.75% on October 1, 2016.

Priorities for the sales tax are:

  • Improving neighborhood streets and drainage;
  • Preserving a "stable" property tax rate;
  • Ensuring a quality park system;
  • Constructing and maintaining community improvements;
  • Funding equipment for maintenance;
  • Repayment of future bonds for large projects; and
  • Attracting quality jobs.

Neighborhood streets are our top priority

Fully funding all street needs is estimated to cost an additional $2 million to $3 million more per year. That is why the City is committing to spend at least $2 million more per year (from $1.6 million annually to at least $3.6 million) just for neighborhood streets. Street needs will be determined by condition and neighborhood feedback.

Keeping the City’s property tax stable is also a primary goal

High or fluctuating property taxes can be harmful. We understand the need to provide a stable property tax to our community’s residents and businesses for the long-term future.

Preserving our park system - one of Salina’s biggest assets

The tax will be used both to retain the quality of our parks and to enhance them in response to community needs. A major park improvement includes a reasonable and slimmed down approach renewing the Smoky Hill River. This river channel is a major natural resource that serves as the primary storm water storage basin for a large part of our community, so filling it in is not an option. A limited project focus will be on the basic stream area only. This focus includes: getting the sediment out, re-shaping the banks where needed, constructing a single and accessible hike/hike path and providing community gathering space along the downtown stretch. The City will commit to redirecting not more than $1.3 million per year for this project. That is the current, annual debt service used to fund the Kenwood Cove Water Park. We think this slimmed down approach can ensure long-term viability for drainage and make the Smoky Hill River channel an amenity and focus of community pride.

Attracting “quality” jobs

Our community needs growth in “quality” jobs, with higher wages and benefits. A city cannot create these jobs, but we can create a positive environment for them. This includes investment in: roads, utilities, land, training and relocation needs. Our investment will be focused on items that give Salina a special edge and cannot be taken out of our community.

Why use a sales tax and how will the change affect my wallet?

With a sales tax, a small increment can fund many projects, with nearly one-third (1/3rd) of the revenue estimated to come from outside of our community! On average, consumers will spend about 4% more with the new tax. The increase equals only 35 cents per $100 spent. While there is no perfect tax, a sales tax is based on consumption and is much fairer than a property tax.

How will Salina’s tax rates compare to our competing communities?

The table below shows how Salina’s tax rates compare to certain other Kansas communities in 2015. Strong communities see stable and long-term growth of residents, businesses and visitors. A solid infrastructure is a key ingredient. While we do not believe Salina should be one of the highest taxed cities, a reasonable level of taxation can ensure investment in our basic infrastructure needs. This investment will ensure that Salina can serve its residents and businesses well, while also preserving our future viability in north central Kansas.

City
Sales Tax
City Sales Tax
Junction City
9.75% Hays 8.75%
Dodge City
9.15% Manhattan 8.75%
Topeka 9.15% Salina (rate effective in November 2016)
8.75%
Abilene 9.10% Garden City
8.65%
Hutchinson 9.10% Salina (currently)
8.40%
McPherson 9.00% Wichita 7.50%

(Source: Kansas State & Local Sales Tax Rates – Kansas Department of Revenue)

How can the public be sure the sales tax will be used as intended?

First, the ballot language intentionally limits the use of the sales tax. The City Commission annually updates our 5-year capital improvement plan through a series of public meetings. These sales tax proceeds will be kept in a separate, budgeted fund for full accountability. Historically, the City has fulfilled our commitments. In 2008, we committed to using the current sales tax for similar needs and for Kenwood Cove Water Park.
Since 2009, this sales tax has been used to fund the following list of needs:

Community Need
Amount (in millions)

Street & Related Improvements

$10.50

Kenwood Cove Water Park

$8.80

Property Tax Stabilization

$4.90

Job Growth

$3.50

Maintenance Vehicles & Equipment

$3.10

Flood Protection

$0.95

Facility Maintenance

$0.88

Human Services

$0.24

Other Project Costs

$1.30
Total Community Investment
$34.2 million

(Source: City of Salina Finance Department)

Can the need for sales tax be diminished with efficiency improvements?

The City currently applies a Continuous Process Improvement (CPI) program, using private sector Lean Six Sigma (LSS) waste reduction tools. We are a government leader in this field, with our program being recognized nationally. In fact, we are the only government in Kansas taking process efficiency to this level. This effort has helped to keep our property tax rate low, but it is not enough to keep our operational costs stable AND fund all neighborhood streets and other community improvement needs.

When will the community see a positive impact?

The City should begin receiving the new sales tax increment before year-end. This means that we can start applying it to neighborhood streets and other community needs as early as next year!

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