Ellis County is looking at a countywide sales tax to fix its budget crisis.
But the question is whether it would share the money with cities in Ellis County.
That was the debate among the three Ellis County Commissioners at their regular meeting Monday evening, asking whether voters will approve a tax the county doesn’t share among the cities.
If shared, that would more than halve the amount of money the county gets from the tax.
But County Commissioner Dean Haselhorst was firm the county must share, when it comes to the cities.
“I’m not going to single out we’re going to take it all,” Haselhorst said. “Because I think that’s going to crash, quicker than you can imagine. If we’re going to say Ellis County is going to keep it all, it’s going to crash …. Because why would Victoria vote for it? Why would Ellis vote for it? Why would the city of Hays vote for it?”
By an equation set out in Kansas law, if shared, Hays would get 49.12 percent of the money collected, the county would get 41.65 percent, Ellis would get 5.75 percent, Victoria 3.06 percent and Schoenchen just under half of 1 percent, said Ellis County Administrator Phillip Smith-Hanes.
After much discussion Monday evening, the commissioners asked Smith-Hanes to ask the cities if they’ll support a county push for a countywide sales tax.
Any countywide sales tax would have to pass the approval of the county’s registered voters.
The commissioners could call no later than mid-September for a special election, and if approved collection would start Jan. 1, 2020, said Smith-Hanes. If waiting until the next general election in November 2020, the tax would start April 1, 2021, he said.
By law, the county could set a tax in one-quarter increments, up to 1 percent. At the lowest rate, one-quarter percent, a countywide sales tax could generate about $1.55 million annually, said Smith-Hanes. Of that, the county would keep about $630,000. The county in looking at the 2020 budget is scrutinizing every penny to find $2 million in reductions.
“If we went with the quarter-cent route, $630,000 isn’t going to go very far to solve anyone’s problems, and we’d be wishing real fast we had more sales tax,” said County Commissioner Butch Schlyer. “So I would be in favor of pursuing a half-cent sales tax, as Dean suggested.”
In 2013, county voters approved a countywide sales tax to pay for construction and renovation of county buildings, but that tax had a five-year limit and ended last fall.
County Commissioner Dustin Roths said that while he normally favors making government smaller, he would support a quarter-cent sales tax.
“I gotta say that there are some really, really tough decisions ahead of us if we don’t find a way to fund what we’re doing currently,” Roths said.
Ellis County is one of about 17 or 18 of the 105 counties in Kansas with no sales tax, said Smith-Hanes.
By law the county is required to share a sales tax with its cities, unless the proceeds are spent only on county-provided health care services, such as the county health department, mental health services or ambulance service. Right now, property taxes are the county’s major revenue source.
“I’d rather pay sales tax than I would property tax,” Haselhorst said. “I don’t want to tell anybody I’m going to raise their property tax by 10 percent so we can fund the county.”
Roths agreed. “Consumption based taxes are a smart play,” he said, but added also that there’s no guarantee taxpayers will approve any sales tax at all.
Schlyer advocated the county proceed for the 2020 election.
“I do think, following the next couple of budgets we’re going to be doing, and the public sees the draconian cuts we’re going to be making, there might be more appetite for a sales tax from the voting public,” Schlyer said. “Because it’s going to get bad before it’s going to get any better.”
Voters might approve if the money goes for a vital county provided service, like funding a little over half the budget of the county’s emergency services, Roths said.
He said the county’s paramedic-based ambulance service has value to people, and is particularly appealing to older residents, who would say “I do like a paramedic that will show up at my house within five minutes if I’m having a heart attack.”
Haselhorst mentioned that the county will need $10 million over the next 10 years to fix its roads and bridges. That includes 10 bridges that will need replaced in the next decade, which he said will cost way more than $10 million.
“We’ve been robbing out of Road and Bridge since I’ve been a commissioner over eight years now,” Haselhorst said.
Schlyer questioned how many people care about county roads.
“I don’t know that a lot of the people that live in the city really care about what bridges we have to fix out here,” he said.
Haselhorst said he thinks closing roads would spark an outpouring.
“Maybe they don’t go out in the county very often, but the first time they go cross country to Cedar Bluff Lake and they can’t get there because we’ve closed Golf Course Road because the bridge is out, I think that will be eye-opening, even if they are residents of Hays,” he said.
EMS would be an easier sell to the public, Schlyer said.
“If we reach a point where we say we gotta close up an ambulance to Ellis or Victoria, people are going to scream at us,” he said.
Haselhorst told Roths and Schlyer, both new to the commission, that town hall meetings to answer questions and provide information helped pass the last sales tax.
Schlyer and Roths liked that idea.
“It’s just a matter of getting the proper plan in place so we can get the buy-in from the public,” Schlyer said.
“I think if we sell it right, we’ll have good support,” Haselhorst said, noting county department heads attended the town hall meetings previously and that Smith-Hanes could help sell it.
Smith-Hanes replied, “Just to clarify, Mr. Chair, Phil will not be selling anything, Phil will be providing unbiased information to residents.”
Haselhorst asked Smith-Hanes to sound out possible support from the cities.
As the owner of a retail shop in business for 10 years, Roths cautioned that it’ll be tough to pass a half-cent tax, unless it’s tied to a service all county residents use.
“We cannot continue to offer the same level of EMS services unless we raise more money in the county,” Roths said. “We have to cut hard things now.”