HUTCHINSON, Kan. — Hutchinson City Manager Jeff Cantrell sent a letter obtained by Hutch Post to Kansas Senate Tax Committee chair Caryn Tyson regarding a provision in Senate Bill 87 that would change the way sales tax is apportioned in the county. The letter is below:
SB 87 would be a major shift in the allocation of the county wide sales tax distribution and would have severe budget implications. The City of Hutchinson collects approximately $5.5 million annually from this sales tax. A loss of this magnitude could not be dealt with in one or even two budget years. In comparison, this amount equals half of our general fund property tax collections.
Budget impacts of this magnitude cannot be left to chance on the ability to reach an interlocal agreement with the county. This could strain relationships between Cities and the County as the County is forced to decide what is fair and administer the agreement. What if an agreement cannot be reached, especially before July 2021?
If implemented in 2021 and an interlocal agreement is not reached or is unfavorable for the City of Hutchinson, the only option we would have would be to drastically cut services. Fire and police services would not be able to avoid the cost cuts. With 70% of our general fund budget paying for personnel, many jobs would be at stake, while unemployment levels are already high.
In 2022, we would be limited on other sources of income as taxpayers can only absorb so much in property tax increases and budget cuts would have to continue. Taxpayers would not understand why services are being cut if they are paying the same amount in taxes.
Please consider the drastic impact this will have on many cities and do not pass SB 87. We believe the current policy under K.S.A.12-192 (2020 Supp.) is the fairest method to determine the distribution. Changes to the formula and method that have wide spreading impacts should not be taken lightly.
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