Excise tax revenues trickling in
Tonganoxie, Basehor city coffers from tax on new construction
Basehor city officials estimate $1.4 million is required to renovate one mile of road to standards required under city regulations. If so, the city has gained enough funds from its excise tax to rebuild roughly one-third of a mile.
An excise tax is a fee applied to new developments in cities. Basehor's rate is 9 cents for each square foot of new construction, while Tonganoxie's rate is 5 cents a square foot.
Nearly two years after Basehor voters approved the levy in an April 2002 special election, the excise tax has netted the city $423,380 in revenue for the renovation of roads such as 155th, 158th and 150th streets, Leavenworth and Parallel roads.
In Tonganoxie, revenue from the city's excise tax has not been as high.
Since June 2001, Tonganoxie has received $150,286 through the tax. Last year, the city netted $87,170, assistant city administrator Kathy Bard said.
In Basehor, the city is leaving the money in investment accounts for future use, city treasurer Baron Powell said.
"It's sitting there accumulating interest and growing," Powell said. "We hope to get it to a million before we think about touching it."
Bard said Tonganoxie has taken a similar route. Money is invested in a money market account with the same rate as the municipal investment pool.
Tonganoxie won't be touching that money anytime soon, either.
"We haven't collected enough money to do anything yet," Bard said. "There's not even enough to do half a block realistically with curb and gutter, storm water and mill and overlay."
Basehor has seen funds gained from the excise tax gradually increase since voters approved the levy by a 23 percent margin in 2002. The city generated just $2,405 from the tax for its investment in 2002 with the remaining sums coming in 2003, when the levy had a full year of implementation to its credit.
The city formulated the nine cents per square foot fee based on construction estimates that renovated roads requiring $225 of funding per lineal foot. Basehor can raise the excise tax annually but has yet to approve an increase.
Basehor standards call for improved roads to be 36 feet wide, with curb and gutters, asphalt and storm drainage.
Tonganoxie's requirements for improved roads are 31 feet with parking on both sides and 28 feet for one-side parking, according to city administrator Shane Krull.
Bard said some think the tax is used only to improve roads in subdivisions, but developers build those roads. The tax can be used for existing roads, including gravel roads. With subdivisions pushing out toward those roads, Tonganoxie must look at bringing those roads to city standards, Bard said.
The city of Basehor asked voters to approve an excise tax so the funds could be used for obtaining matching fund grants for road improvements. To be eligible for most state and federal grants, the city must match 25 percent of the total funds requested.
In Basehor, a vote was conducted on the excise tax measure after a group of citizens successfully filed a protest petition with more than 100 residents' signatures. The special election, however, kept the tax on course.
Excise tax opponents said it would harm future economic development and discourage residential developers from building in the Basehor.
It appears the excise tax has not had the dire consequences some predicted.
In 2003, the U.S. Census Bureau listed Basehor as the fifth-fastest growing city in Kansas, while Tonganoxie ranked third.
Both cities have more enticing rates than area cities. Last year, Bard said Gardner and Shawnee had rates at 17 cents, Lenexa at 18 cents and Olathe and Bonner Springs at 19 cents. De Soto, which had a rate of 14 cents last year, has ballooned to 23 cents this year.