Memorandum

City of Lawrence

City Manager’s Office

Date:	4/23/09
To:	David Corliss, City Manager
From:	Casey Toomay, Budget Manager Michelle Stevens, Intern
CC:	Cynthia Boecker, Assistant City Manager Diane Stoddard, Assistant City Manager Jonathan Douglass, Assistant to the City Manager
RE:	Assessed Valuation, Mill Levy, and Local Sales Tax Comparison Information for the 2009 Budget Year

Per your request, information related to the assessed valuation, mill levy, and local sales tax for the ten largest cities in Kansas is provided below.  It is important to remember that the municipal services provided by each municipality vary.  For example, libraries and transit in Johnson County are funded by the County, not the city.  Therefore, cities do not levy property tax to support these functions. 

Assessed Valuation and Mill Levy

The table below shows how the City of Lawrence compares to the nine other largest cities in the state in terms of assessed valuation for the 2008 and 2009 budget years.

City	Population (2005 est.)	2007 total estimated assessed value	2007 assessed valuation per capita	2008 total estimated assessed value	2008 assessed valuation per capita
Wichita	347,996	$3,211,938,914	$9,230	$3,145,832,409	$ 9,039
Overland Park	168,000	$2,858,903,882	$17,017	$2,873,398,579	$17,103
Olathe	116,910	$1,350,381,302	$11,551	$1,371,206,924	$11,728
Unified Government	144,210	$1,254,330,729	$8,698	$1,143,038,682	$  7,926
Topeka	122,008	$1,040,553,093	$8,529	$1,039,723,989	$  8,521
Lenexa	43,765	$1,005,163,545	$22,967	$939,519,742	$21,467
Lawrence	88,664	$853,590,988	$ 9,627	$ 862,037,586	$ 9,722
Shawnee	56,915	$740,069,197	$13,003	$ 738,920,861	$12,982
Manhattan	49,462	$417,648,011	$8,444	$429,976,877	$8,693
Salina	45,956	$392,728,487	$8,546	$399,982,148	$8,703
City
Average	118,389	$1,312,530,815	$   11,761	$1,294,363,779	$11,588
Median	102,787	$1,022,858,319	$    9,429	$ 989,621,865	$  9,381

Source:  County Clerk’s offices

The table highlights the following:

• Based on 2005 population estimates, Lawrence is the sixth largest city in the state.

• Lawrence ranks seventh in terms of total assessed valuation for the 2009 budget year just as it did for the 2008 budget year.  The city with the greatest total assessed value is Wichita, the city with the largest population. 

• When comparing assessed valuation per capita, Lawrence ranks fifth.  We are four percent (4%) above the median but still more than sixteen percent (16%) below the average assessed valuation per capita.  The four cities with higher assessed valuations per capita are all in Johnson County. 

The table below shows the City mill levies for the ten largest cities for the 2008 and 2009 budget years. The city mill levy in the 2008 and 2009 budget for Lawrence ranks fifth among the top ten largest cities.  At 26.647 mills, it is 0.039 mills above the median but 1.035 mills below the average.

City	2008 Total City Mill Levy	2009 Total City Mill Levy
Unified Government	40.685	40.258
Manhattan	31.683	34.268
Topeka	32.457	32.682
Wichita	31.979	32.056
Lawrence	26.787	26.647
Lenexa	26.477	26.568
Salina	23.789	25.886
Olathe	25.03	24.908
Shawnee	24.652	24.693
Overland Park	8.832	8.852
Average	27.237	27.682
Median	26.632	26.608

Local Sales and Use Tax

Municipalities across the state levy sales tax for a number of purposes.  For most communities, sales tax is levied for general purposes.  Some municipalities also levy sale taxes for special purposes.  The City of Lawrence has both.  In 1971, the City passed a general purpose 0.50% sales tax.  In 1990, voters passed a 0.50% city sales tax intended for public safety.  Last November, voters approved a 0.30% sales tax for infrastructure and a 0.25% sales tax for transit.  A number of cities, including Lawrence, have also established special taxing districts.   

The chart below shows a breakdown of the city and county sale tax rates by purpose as well as the total combined sales tax rates in the ten largest cities in the state.  Included in the combined sales tax rate is the 5.3% sales tax levied by the State.  Cities do not receive any of this revenue.  Cities do receive a portion of the sales taxes levied by the County in which they are located based on a population ratio.

The combined sales tax rate in the City of Lawrence is among the highest of the largest cities in the state.  Of the cities in this comparison, only the City of Lenexa has a higher combined sales tax rate, however, as of October 1, Topeka will also have a higher combined sales tax rate.  In addition, there are taxing districts in Overland Park, the Unified Government, and Olathe with higher combined sales tax rates than Lawrence.  

City	City Sales Taxes	County Sales Taxes	Combined Sales Tax Rate
Wichita	none	0.50% property tax relief	6.30%
		0.50% road and bridge projects
Wichita River Walk Redevo Dist.	1.00% for River Walk improvements	none	6.30%
Overland Park	1.00% general purpose	0.50% general purpose	7.650%
	0.125% streets	0.25% public safety
		0.25% public safety capital and operations
		0.10% stormwater
		0.125% research triangle
Overland Park Transport. Dist	1.00% improvements at location	same as above	8.650%
Overland Park Transport. Dist	.5% improvements at location	same as above	8.150%
Unified Government	1.25% speedway debt	1.00% speedway debt	7.550%
Kansas City Rack Track	1.25% speedway debt	same as above	7.550%
Kansas City Transportation District	0.6% improvements at location	same as above	8.150%
Kansas City Transportation District	0.6% improvements at location	same as above	8.150%
Kansas City Transportation District	0.10% improvements at location	same as above	7.650%
Olathe	1.00% general purpose	0.50% general purpose	7.650%
	0.125% park excise tax	0.25% public safety
		0.25% school tax
		0.10% storm water
		0.125% research triangle
Olathe Gateway TDD No. 1a	1.00 improvements at location	same as above	8.650%
Olathe Gateway TDD No. 1b	1.00 improvements at location	same as above	8.650%
Olathe Transportation District	1.00% improvements at location	same as above	8.650%
Olathe Transportation District	1.00% improvements at location	same as above	8.650%
Topeka	1.00% general purpose	0.65% Washburn	7.450%
	.50% streets (goes into effect 10/1)	0.25% economic development	(7.95% as
		0.25% streets and bridges	of 10/1)
Lawrence	0.50% public safety	0.50% property tax relief	7.850%
	0.50% general purpose	0.50% parks and rec, health, jail
	0.30% infrastructure
	0.25% transit
Lawrence Bauer Farms TDD	1.00% improvements at location	same as above	8.850%
Shawnee	1.00% general purposes	0.50% general purpose	7.750%
	0.125% public safety	0.25% public safety
	0.125% parks and pipes	0.25%economic development
		0.125% research triangle
		0.10% storm water
Manhattan (Pottawatomie Co.)	1.00% general purpose	0.50% general purpose	7.300%
		0.50% road and bridge projects
Manhattan (Riley Co.)	same as above	same as above	7.300%
Manhattan Transportation District	0.50% improvements at location	same as above	7.800%
Manhattan Transportation District	0.50% improvements at location	same as above	7.800%
Manhattan Transportation District	0.50% improvements at location	same as above	7.800%
Lenexa	1.00% general purpose	0.50% general purpose	8.025%
	0.125% storm water	0.500% public safety
	0.15% roads	0.125% research triangle
	0.225% parks/civic facility	0.100% storm water
Salina	0.5% general purpose	1.00% general purpose	7.200%
	0.4% economic development

Sales Tax Elections

A number of communities in this comparison have held successful sales tax elections recently.

• Voters in Lawrence approved a 0.55% sales tax, with 0.25% being used towards transit and 0.30% being used for infrastructure.  This brought the total tax rate to 7.850%.

• Voters in the cities of Johnson County approved a 1/8 sales tax that is used for the research triangle. This raised the total sales tax rate in all of Johnson County by 0.125%.

• Voters in Lenexa approved a 3/8 cent sales tax, 40% of which would be used for pavement management projects with the remainder going to recreation, civic, and cultural amenities.  This brought the total tax rate to 8.025%.

• Voters of Salina approved a sales tax of 0.15% for economic development.  This brought the total tax rate to 7.200%.

• Voters in Topeka approved a half a cent sales tax for streets that will go into effect October 1, 2009. 

The table below compares the ten largest cities in Kansas in terms of their total city and county sales and use tax distributions for 2007 and 2008, as well as the total city and county sales and use tax budgeted for 2009.  The table shows how some communities, like Lawrence, budget increases in sales tax while other cities budgeted below actual receipts.  Staff will continue to research the rationale cities use to budget their sales tax revenues but it is likely some communities underestimate sales tax in order to satisfy the 5% fund balance limit. 

City	2007 TOTAL Sales Tax Revenue*	07 Sales Tax Revenues Per Capita	2008 TOTAL Sales Tax Revenues*	08 Sales Tax Revenues Per Capita	2009 Budgeted Sales Tax Revenues**	09 Budgeted Sales Tax Per Capita
Lenexa	$23,333,752	$ 533	$23,245,389.07	$  531	$23,312,283.00	$     533
Overland Park	$69,959,536	$416	$66,214,759.91	$ 394	$72,500,000	$     432
Manhattan	$15,164,199	$ 307	$15,332,623.81	$  310	$ 9,998,900	$     404
Shawnee	$19,637,522	$ 345	$19,557,923.52	$  344	$  20,926,900	$     368
Salina	$13,955,363	$ 304	$14,070,647.21	$  306	$16,577,583	$     361
Olathe	$39,785,841	$ 340	$39,757,068.71	$ 340	$ 39,752,084	$     340
Topeka	$34,803,745	$ 285	$36,634,475.94	$ 300	$ 37,393,073	$     306
Lawrence	$21,989,782	$ 248	$23,028,955.00	$ 260	$26,888,375	$     303
Unified Government	$44,925,213	$ 312	$41,304,302.84	$ 286	$ 39,219,000	$     272
Wichita	$49,255,687	$ 142	$51,253,194.24	$ 147	$ 52,956,142	$     152
Average	$32,849,183	$ 300	$34,128,216.80	$ 299	$ 36,245,784	$     326
Median	$28,242,880	$ 307	$36,634,475.94	$ 306	$ 37,393,073	$     340

This table highlights the following:

• The City of Lawrence ranked sixth in total sales tax revenues received in 2008.  Sales tax revenues budgeted in Lawrence for 2009 ranks sixth among the ten largest cities.  We budgeted $9.4 million dollars less than the average, or more than twenty-five percent (25%).

• When comparing sales tax revenues received per capita, the City ranked next to last in 2008. This is about twenty percent (20%) below the median in 2007 and more than percent (15%) below the median in 2008.  Only the City of Wichita received less sales tax revenue per capita in both 2007 and 2008.  The City of Lenexa received the most per capita sales tax in both 2007 and 2008.

• Budgeted sales tax per capita in Lawrence is eighth among the top ten largest cities for 2009.  Wichita and the United Government budgeted less sales tax per capita.  At $303 per capita, budgeted sales tax per capita in Lawrence is about than nine percent (9%) below the median and about seven percent (7%) below the average.  The City of Lenexa budgeted $533 per capita for 2009, the most of any city in this comparison. 

Conclusion

While the services provided by municipalities vary, it is possible to compare the City of Lawrence to the nine other largest cities in the state in a number of areas.  Our assessed valuation per capita is four percent higher than the median.  The city mill levy for 2009 is just below the average and our sales tax rate is now among the highest in the top ten largest cities in the state although most area communities have sales taxes in the upper 7% range.