Baldwin City sales taxes performing well

Baldwin City government Enlarge photo

October 13, 2015

Although common sense tells Brad Smith that an event the size of the Maple Leaf Festival ought to produce a noticeable bump in the city’s sales tax collections, he has been unable to document that assumption.

Area municipal sales tax rates

Baldwin City, 8.75

Edgerton, 8.75

Eudora, 8.5

Garnder, 9.225

Lawrence, 9.05

Ottawa, 9.10

Wellsville, 9.0

A number of years ago, Smith, the city’s finance director and now interim city administrator, was tasked by then Mayor Ken Wagner with putting a number to what the festival meant to the city in terms of sales tax revenue. To his disappointment, he couldn’t provide a figure.

“I’m a numbers guy,” he said. “I would like to be able to say ‘the Maple Leaf Festival brings $10,000 of tax revenue to the city,’ but you just can’t find it.”

A check of the records available on the Kansas Department of Revenue web site shows October is an ordinary month for sales tax collections in Baldwin City. For example, the $34,185 in sales taxes the Kansas Department of Revenue’s web site shows was collected in Baldwin City in October 2014 was better than four other months, but more than $2,000 less than that collected in September 2014 and $4,500 less than June, the high-water month for 2014 sales tax collections in the city.

Smith, who has access to much more detailed sales tax numbers, delved deeper, looking at the sales tax receipts from select vendors, retailers and restaurants to the city. Still, he could find nothing documenting significant increases in sales taxes during October.

Several things complicate the search, Smith said. Different businesses or individuals file their taxes on a monthly, quarterly or annual basis, and some may send payments in too late to be recorded as October collections. Another factor is that the city get sales tax revenue from entities he’d never heard of, some of which may be Internet vendors, he said.

If he can’t define what the festival means to Baldwin City in terms of revenue, he can say the city’s sale tax receipts are healthy overall.

“The economy is slowly picking up,” he said. “We’re about 4 percent ahead of expectations, which isn’t always what’s budgeted.”

The city budgets sales tax collections conservatively, to ensure debt obligations are safely covered in budgets, Smith said.

As of the end of September, the city had received about $150,000 in revenue from its 1.25 cent tax imposed on local sales. Helping to give that number context is with 75 percent of the year completed, the city has collected 78 percent of the revenue the local tax was expected to add to city coffers this year, Smith said.

The city gets more revenue from its share of Douglas County’s 1 cent sales tax, which benefits from the more robust retail environment in Lawrence. Smith said. That has produced $362,000 in revenue for the city through the end of September. All that revenue is earmarked for the city’s general fund, whereas the city’s local 1.25 cent sales tax has three components — 0.5 cents is designated for general operations, 0.5 cents for general infrastructure or capital improvements, and 0.25 cents for quality of life upgrades to the library, city parks and recreational facilities.

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