Sales Tax Referendum: A Conversation With Wichita City Manager Bob Layton
A one-cent sales tax for the city of Wichita will be brought before voters in this November’s election. The tax would last five years and bring in roughly $400 million dollars. The bulk of that would be used for long-term drought protection and job creation, with Wichita Transit and street improvements sharing about $70 million.
KMUW’s Sean Sandefur sat down with Wichita City Manager Bob Layton to better understand this proposed sales tax.
Why were these four areas chosen?
It started a year ago, with the strategic planning process. [Wichita City Council] wanted to establish priorities for the next five years and decided that they didn't want to do that in a vacuum. Instead, they wanted input from the community. So we went through a pretty exhaustive process called Act ICT; we went to over a hundred community groups, asked them to identify the priorities as they saw them and we came up with a list of eight top priorities. After discussing those with more detail, the council narrowed it down to the four most important.
What were citizens most concerned about?
Water was probably the number one issue that came out of the engagement process and it was in response to the 2 ½ year drought and the pretty severe conservation measures required in order to maintain our water supply. It got down to enhancing the Aquifer Storage and Recovery system, which takes water out of the Little Arkansas and puts it underground for use later. The idea is to get another 10 million gallons of water a day out of that system. We're planning for a dust bowl--a ten-year drought period.
This isn’t the first time the city has tried to solve the problem of a drought, why isn’t the previous plan working?
Well, it worked out, but maybe not all the tools were in place. The Aquifer Storage and Recovery system was considered to be that second water source that we needed, and it did perform, but maybe not as it was originally anticipated. And you have to remember, this was a relatively new technology. There were a lot of things that we learned about equus beds. This time, we worked with a number of consultants—hydrologists and the United States Geological Survey—to get better information on what's happening with the various water sources that feed the ASR. We have a really good idea that this phase will work and allow us to get additional water.
Let’s move on to transit, what will this sales tax do for Wichita’s transit system?
It'll do two things for transit: one, it will help stabilize the existing system. We are in need of a capitol replacement; there are a number of changes that are necessary just to get us on more sure footing going forward. The other half will be used to expand service. We’re looking for more crosstown service that’s more convenient for residents. So, we'll be slowly extending service and also going to night service. Which we get a lot of demands for, especially from second shift workers.
This funding level for the bus system is only available for five years, so what happens after?
Well what we're hoping is that we'll be on better footing and be able to sustain the service that is implemented during this fiver year period. Now, it will probably still take ongoing support from our operating budget and property tax, and maybe to a higher degree than what it is today, but at least it will be manageable because we would have taken care of the capital costs that we've had to defer in order to make our budget balanced the last several years. If we get some revenue growth, we may end up earmarking some of that for transit so that at the end of that five year period, we'd have sort of a seamless transition.
The jobs part of this has been questioned by some in the community, some asked that it be removed from this plan. Why did the city end up leaving it in?
Right behind water, job creation was the number two priority that came out of community engagement--those two were far above everything else. The question is, how do you put a package together that will create jobs and that residents are comfortable with? And I think the reason that I recommended moving forward with this is because we started to change the dialogue, it's not a matter of a traditional incentive program, but one that emphasizes infrastructure and improvements, education, and retraining.
Could you breakdown what this job creation money would actually be used for?
There are three categories, 40 percent of the money would go towards infrastructure and improvements—and that could be something as simple as water, sewer, and streets to support either one or multiple businesses into a business park, for instance. It could also be used for infrastructure that's necessary inside the business. The idea in that case is that maybe an existing business would need to retool in order to be able serve another industry.
Another 40 percent of the fund would go for job training and retraining, and that's very important, especially as we diversify. So, that could be Wichita Area Technical College, it could be the National Center for Aviation Training, and it could be any of the universities. And then 20 percent is for other expenses necessary for relocation and expansion. So that gives a little flexibility.
Let’s move on to street improvements, how will this sales tax help with street improvements?
I've been here for about 5 1/2 years and every time I go to a neighborhood meeting I hear about the condition of our residential streets. Generally speaking, I think we do a good job on our arterial and main streets, but residentials, they've been hard to keep up. We’ve had limited resources in the last five years, the city council has doubled the amount of money we put in annually toward streets, but some of our worst streets still need attention. The sales tax would allow us to pave, or rehab about 111 miles of residential streets. And those are the ones in the worse condition, that's how they're targeted.
The idea that a sales tax is needed for basic street improvements has been criticized, why is this additional funding needed?
We've been really limited in our revenue growth for a number of years, but especially since 2008. We knew we had an infrastructure problem, most large cities in the country have infrastructure issues. It's hard to make the budget balanced. At times, there's been a deferral of capital improvements, we've tried not to do that in last five years, but again, the pie...it can only be stretched so far. This [sales tax] is kind of a shot in the arm for these four programs and it allows us to catch up, to address what the residents have said are the most severe issues.
What happens to all of aforementioned areas if the tax is not approved?
I think the community support for doing something with water is strong. If a sales tax isn't approved, I will be making a recommendation to the council that we seriously pursue a rate-based solution. I know that will have impact on the rate payers and a pretty significant one on some of our businesses, but at the same time, what I'm hearing, they'd rather do that then not have a predictable water source going forward. So, that would be the plan with water.
With transit, if we're not funded, we'll have to make pretty significant cuts in the system by 2016. Today, we're estimating that would be about a 25 percent cut in service levels in order to balance the budget and match the local revenues and the federal revenues.
On streets, we'll just be further behind, and that's, again, over a hundred miles of streets that we'll have to find a way to fund.
And with jobs, I don't know--we don't have another funding source. Our job growth has grown at an average rate of one-percent for the last fourteen years and we need to do something different.