City looks to lower property tax by raising sales tax

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City looks to lower property tax by raising sales tax

By Jessica Oakley

WICHITA, Kansas, May 13, 2008 – It’s hard to find anyone happy with their property tax bill, but a new proposal could bring some relief by raising the sales tax.

For every Wichita homeowner it is a yearly expense.

“Property tax affects everyone in the city of Wichita period,” said city council member Paul Gray.

But now city council members are looking at ways to alleviate some of the burden. The latest idea: a one percent increase in the city sales tax.

"To everyone in the community it should be a decrease in what they pay in taxes,” Gray said. “So, that’s a win for everybody."

The city would increase the sales tax by one percent to 7.3 percent. The additional revenue would be enough to lower property taxes by as much as fifteen percent.

The average $100,000 home costs its owner $368 in city property taxes. That would shrink to $172 should the new sales tax kick in; saving the homeowner $196 per year.

And the savings would stop there. The new sales tax would also help reduce car tags. A $20,000 car would see its tag price drop about $33 per year. Officials say all of this would in turn benefit businesses.

“It makes us more competitive with the other communities around us when we try to attract national retailers, national restaurants, and businesses looking to relocate,” Gray said.

"The idea of having a mechanism to lower property taxes has a definite appeal, since that is the most unpopular tax in this community,” said Karl Peterjohn with Kansas Taxpayers Network.

But Peterjohn says he would like to see a guarantee that if the city has residents pay an extra penny on the dollar in sales tax, they don't turn around four years later and start increasing the property tax.

City council members say the idea needs more thought and discussion before any decisions are made; pointing out it would take a referendum to pass a citywide sales tax.

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