Sales tax considered to plug street maintenance shortfall

Olathe City Manager Michael Wilkes discussed the current Olathe street funding challenge with the City Council on Tuesday and outlined why it should be addressed sooner rather than later, which includes asking voters to approve a 3/8-cent sales tax that would sunset in 10 years.

Wilkes said, “The bottom line is if we don’t begin funding our street maintenance at a significantly greater level, in 10 years or less our taxpayers will be paying at least 10 to 15 times what is needed today for streets.

“It is our responsibility to make sure we don’t create that major burden for ourselves and future tax payers if we can avoid it.”

According to City staff, an additional $9.26 million per year (average) is needed to adequately fund street maintenance over the next 10 years.  Without which, the cost of repairing streets will increase exponentially and dramatically.  The City currently maintains over 1,200 lane miles valued at over $1 billion.

Wilkes indicated that the City has been investing as much general (operational) fund cash as it responsibly can in street maintenance despite making significant cuts to other operations over the past several years.  However, he cautioned that diverting enough money to cover the street maintenance shortfall would have unacceptable consequences.

Wilkes said, “Today, we are spending nearly 70 percent of our general fund money on transportation and public safety because that’s where our tax payers have told us they want it invested. Much of the remainder of the budget goes to programs (IT, Human Resource, Finance, etc.) that serve in critical support roles, yet those are the areas that have seen the vast majority of cuts.

“The fact is, we simply cannot divert the revenue needed without seeing services impacted in the areas our residents say are most important.”

Wilkes said staff has been evaluating this issue for several years, and ultimately came to the conclusion that asking voters to consider a sun-setting 10-year, 3/8-cent sales tax was the most responsible approach.

“The Council has the ability to increase the mil rate, but that rate increase only applies to our property owners, not to all the people using our streets including the many thousands who live outside Olathe,” Wilkes said.

In addition, Wilkes said he believes this is consistent with City Council direction.

“A sales tax would require voter approval, and I know the Council believes this decision would rise to the level where Olathe tax payers should have a direct voice,” he said.

According to Wilkes, the funding shortfall would be adequately addressed by a combination of the sales tax and the City’s continued commitment to increase general fund cash contributions to the program.

“This issue will not be solved by just passing the sales tax but also by increasing City operational fund commitments and continued belt tightening,” he said.

If approved, Olathe would join the majority of other Kansas City area larger cities that have implemented a sales tax to fully or partially fund street maintenance.  The City Council is expected to decide whether or not to bring a sales tax question to voters by August 6.

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