Memorandum

City of Lawrence

City Manager’s Office

Date:	May 19, 2011
To:	David Corliss, City Manager
From:	Casey Toomay, Budget Manager Michelle Stevens, Management 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 2011 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, only Lawrence and Manhattan levy property taxes to fund libraries. 

Assessed Valuation

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 2010 and 2011 budget years.

City	Population (2008 est.)	2009 total estimated assessed value	2009 assessed valuation per capita	Population (2009 est.)	2010 total estimated assessed value	2010 assessed valuation per capita
Wichita	366,046	$3,151,655,096	$8,610	362,030	$   3,150,148,429	$    8,701
Overland Park	171,231	2,750,228,988	16,062	170,216	2,595,023,004	15,245
Olathe	119,993	1,332,794,724	11,107	117,116	1,257,531,784	10,737
Topeka	123,446	1,013,490,502	8,210	123,024	999,445,379	8,124
Unified Government	142,562	1,063,675,528	7,461	142,108	981,313,268	6,905
Lenexa	46,822	956,643,001	20,431	45,704	857,196,586	18,755
Lawrence	90,520	853,676,870	9,431	90,028	852,586,917	9,470
Shawnee	60,954	716,913,883	11,762	59,828	686,743,405	11,479
Manhattan	52,284	465,543,127	8,904	51,297	471,017,968	9,182
Salina	46,483	397,470,626	8,551	46,006	400,248,283	8,700
average	122,034	$     1,270,209,235	$      11,053	120,736	$   1,225,125,502	$   10,730
median	105,257	$        985,066,752	$        9,167	103,572	$      919,254,927	$    9,326

Source:  County Clerk’s offices

The table highlights the following:

• Based on 2009 population estimates, Lawrence is the sixth largest city in the state.  At 90,028, Lawrence is 13% below the median population. 

• Lawrence ranks seventh in terms of total assessed valuation for the 2011 budget year just as it did for the 2010 and 2011 budget years.  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 almost one and a half percent (1.5%) above the median but more than twelve percent (12%) below the average assessed valuation per capita.  The four cities with higher assessed valuations per capita are all in Johnson County. 

Mill Levy

The table below shows the City mill levies as well as the total mill levies for the ten largest cities for the 2010 and 2011 budgets.  

City	2009 City Mill Levy for the 2010 Budget	2010 City Mill Levy for the 2011 Budget	2010 Total Mills Levied by All Taxing Entities for the 2011 Budget
Unified Government*	40.258	40.808	N/A
Topeka	32.592	32.849	147.415
Manhattan	37.289	32.821	124.981
Wichita	32.142	32.272	120.59
Lawrence	26.693	26.697	123.591
Lenexa	26.574	26.626	127.855
Salina	25.855	26.022	128.498
Olathe	24.837	24.84	130.375
Shawnee	24.699	24.717	125.946
Overland Park	8.890	8.876	109.086
Average	27.983	27.653	128.656
Median	26.634	26.662	125.946

*Total mills levied in Unified Government not available

The 2010 Lawrence city mill levy for the 2011 budget ranks fifth among the top ten largest cities.  At 26.697 mills, the Lawrence mill levy is 0.035 mills above the median but 0.956 mills below the average city mill levy for the 2011 budget.  

Only two of the comparison cities have a lower total mill levy than Lawrence. At 123.591 mills, the total mills levied by all taxing entities in the City of Lawrence is 2.355 mills below the median and 5.065 mills below the average total mills levied by all taxing entities in the comparison cities.

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 levies both taxes.  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.  In November of 2008, 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, such as TIF, TDD, CID, etc.   

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 6.3% sales tax levied by the State, up 1% from last year. Also included are tax rates for any special taxing districts in the city.  For instance, the City of Lawrence and two TDDs, Oread (1%) and Free State/Bauer Farms (1%). While cities do not receive any revenue from the State sales tax or from the special taxing districts, cities do receive a portion of the sales taxes levied by the County in which they are located based on a population and property tax ratio.

Of the ten cities in the comparison, three (Lenexa, Topeka, and the Unified Government) have a higher combined sales tax rate than Lawrence.  In addition, there are special taxing districts in the Unified Government and cities of Manhattan, Olathe, and Overland Park that have higher combined sales tax rates than most of Lawrence.  Six cities (Wichita, Salina, Manhattan, Olathe, Overland Park, and Shawnee) have a lower combined sales tax rate than Lawrence. 

City	City Sales Taxes	County Sales Taxes	Combined Sales Tax Rate
Unified Government	1.25% speedway debt	1.00% speedway debt	8.925%
	0.375% public safety,  infrastructure and STAR bonds
Kansas City Transportation Districts	0.10% improvements at location	same as above	9.025%
Kansas City Transportation Districts	0.60% improvements at location	same as above	9.525%
Kansas City Transportation Districts	1.00% improvements at location	same as above	9.925%
Lawrence	0.50% public safety	1.0% property tax relief,	8.850%
	0.50% general purpose	parks and rec, health, jail
	0.30% streets
	0.20% transit
	0.05% transit
Oread TDD	1.00% improvements at location	same as above	9.850%
Lawrence Bauer Farms TDD	1.00% improvements at location	same as above	9.850%
Lenexa	1.00% general purpose	0.50% general purpose	8.90%
	0.375% roads/parks/civic facility	0.500% public safety
		0.125% research triangle
	Orchard Corners CID	0.100% storm water same as above	9.90%
Manhattan (Pottawatomie Co.)	1.00% general purpose and STAR bonds	0.50% general purpose	8.550%
	0.25% quality of life	0.50% road and bridge projects
Manhattan (Riley Co.)	same as above	same as above	8.550%
Manhattan Transportation Districts	0.50% improvements at location	same as above	9.050%
Olathe	1.00% general purpose	0.50% general purpose	8.650%
	0.125% park excise tax	0.25% public safety
		0.25% school tax
		0.10% storm water
		0.125% research triangle
Olathe Transportation District	1.00% improvements at various location	same as above	9.650%
Overland Park	1.00% general purpose	0.50% general purpose	8.650%
	0.125% streets	0.25% public safety
		0.25% public safety capital and operations
		0.10% storm water
		0.125% research triangle
Overland Park Transport. Dist	1.00% improvements at location	same as above	9.650%
Overland Park Transport. Dist	0.5% improvements at location	same as above	9.150%
Salina	0.5% general purpose	1.00% general purpose	8.200%
	0.4% capital improvements, tax stabilization and economic development
Shawnee	1.00% general purposes	0.50% general purpose	8.775%
	0.125% public safety	0.25% public safety
	0.125% parks and pipes	0.25% law enforcement
		0.125% research triangle
		0.10% storm water
Topeka	1.00% general purpose	0.65% Washburn	8.950%
	0.50% streets, sidewalks, curbs	0.25% economic development
	and gutters, and streetlights	0.25% streets and bridges
Wichita	none	0.50% property tax relief	7.300%
	Water Walk Hotel CID (effective July 1)	0.50% road and bridge projects same as above	9.300%

The table below compares the ten largest cities in Kansas in terms of their total city and county sales and use tax distributions for 2009 and 2010, as well as the total city and county sales and use tax budgeted for 2011.  It should be noted that the 2009 and 2010 numbers include all sales tax proceeds distributed to the cities, including those from any special taxing districts within the various cities.  The cities do not retain these proceeds, but instead must use them to reimburse those responsible for improvements made within the special district.  For instance, the City of Lawrence does not keep the proceeds from the 1% Oread TIF/TDD sales tax or the 1% Free State/Bauer Farms TDD sales tax.

City	2009 Actual Sales Tax Revenues*	09 Sales Tax Revenues Per Capita	2010 Estimated Sales Tax Revenues**	2010 Estimated Sales Tax Per Capita	2011 Budgeted Sales Tax Revenues	2011 Budgeted Sales Tax Per Capita
Overland Park	$ 60,954,264	363	$     48,479,562	285	$     65,029,634	375
Wichita	$ 49,442,734	142	$     47,453,230	131	$     50,595,298	132
Topeka	$  35,502,072	291	$     46,989,877	382	$     47,966,000	376
Unified Government***	$  42,385,227	294	$     44,430,228	313	$    37,976,000	296
Olathe	$  37,296,127	319	$     36,311,775	310	$     37,284,077	260
Lawrence	$ 26,713,535	301	$   29,209,798	324	$   30,090,000	343
Lenexa	$  25,529,556	583	$     23,962,909	524	$   22,832,070	474
Manhattan	$   15,513,209	314	$     18,182,793	354	$    22,527,216	274
Shawnee	$   18,099,997	318	$     17,182,864	287	$     17,063,808	431
Salina	$   15,126,674	329	$     15,067,731	328	$    16,017,620	336
average	$   32,656,340	276	$     32,727,077	324	$     34,738,172	330
median	$   31,107,804	316	$     32,760,787	319	$     33,687,039	340
*source: KS Dpt. of Revenue Office of Policy and Research
** includes city sales and use taxes and the city's share of county sales and use taxes *** 2011 proposed budget sales tax revenues

This table highlights the following:

• The City of Lawrence ranked sixth in total sales tax revenues received in 2010.  This is $3.5 million, or 11%, below the median.  In 2009, Lawrence received $4.3 million, or 14%, below the median.    

• When comparing sales tax revenues received per capita, Lawrence ranked fifth in 2010.  In 2009, only the City of Wichita, Topeka and the Unified Government received less sales tax per capita.  Sales tax received per capita in 2010 was less than 1.5% above the median, compared to 5% below the median in 2009. 

• The City of Lawrence budgeted $30,090,000 in sales tax for 2011.  Four cities budgeted less sales tax for 2011.  The City of Overland Park budgeted the most sales tax of any of the cities in the comparison, $65 million, or 93% of the median.  Salina budgeted the least sales tax in 2010, budgeting 52% below the median.   

• On a per capita basis, Lawrence ranks sixth among the ten largest cities for the amount of sales tax budgeted in 2011.  At $334 of sales tax budgeted per capita, Lawrence is slightly below the median in this comparison.  The City of Lenexa budgeted $500 per capita for 2011, 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 higher than the median.  The city mill levy for 2011 is 0.956 mills below the average.  Three cities have higher combined sales tax rates than Lawrence and most area communities have combined sales tax rates in the upper 8.5% to 9% range. Including special taxing districts, some communities have tax rates in the upper 9% range.