L&T staff report
When voters go to the polls to decide whether or not to approve the school district’s improvement proposal, they will be able to vote for part of the upgrades to be paid by sales tax.
The Liberal City Commission approved a public vote to allow a half-cent sales tax to be used to help fund the bond.
Currently, the 1-cent sales tax has been netting $4 million per year for the City of Liberal. A half-cent sales tax should bring in $2 million, although those handling the projections for the bond will use a more conservative number.
However, should the sales tax eclipse projections and continue to grow as it has over the past four years, the district will have two options.
The first is to accelerate the payment of the bonds.
The second is to reduce the property tax.
According to USD No. 480 Finance Director Jerry Clay, reducing the property tax would most likely be the better option.
“If we pay it off early, we lose the match on those dollars from the state,” Clay said. “If we use it for property tax reduction, we pass the savings on to the local taxpayers.”
Currently, the bond proposal will be funded with 49 percent paid for by state funds, 22 percent from the half-cent sales tax, and 29 percent from property tax.
That means a home valued at $100,000 would pay $9.49 per month to fund the property tax portion.
But if the half-cent sales tax outperforms its current collections, the property tax would drop. In the past four years, Liberal sales tax collections have increased by 20.8 percent. In the past 10 years, 1-cent sales tax collections have increased by more than $1 million.
“It is a result of stronger retail,” City economic director Jeff Parsons said. “Liberal is a strong retail community.”
Liberal’s retail trade zone has been established at 90,000, meaning that Liberal shoppers only make up 22.2 percent of the local shopping base. That means 78.8 percent of the sales tax collected comes from outside Liberal.
If the bond issue does not pass, the commission’s offer to use a sales tax will expire as well, and any future considerations would require that commission to decide whether or not to allow sales tax to be used for school upgrades.
But for this election, the voters can lock in the half-cent sales tax contribution for the length of the bond. The election will take place April 8.