Sales Tax vs Property Tax

The current sales tax rate in Manhattan is 8.95% in most areas of the city. Of that total, 1.00% is a permanent city sales tax dedicated toward annual operations. The first permanent sales tax increase (0.5%) occurred in 1972. The last permanent sales tax increase (an additional 0.5%) occurred in 1980. The proposed 0.3% permanent sales tax increase would be dedicated to funding the six major infrastructure projects over the next 20-30 years.

Many of the projects that would be funded through this proposed sales tax increase will need to occur in some capacity over the next 10 years regardless of if the ballot question passes or fails. Without the additional sales tax revenue, increases in property taxes would likely be dedicated to fund these projects, and projects such as Aggieville and the North Campus Corridor would likely be scaled back, which could result in less committed funding from outside sources or less revenue generation from the TIF District in Aggieville.

Funding these project through this sales tax also allow roughly 25% of the costs to be funded from visitors to the community.  

Sales Tax Rate in Manhattan

State of Kansas 6.50%
City General Purpose (Permanent) 1.00%
Riley County General Purpose (Permanent) 0.50%
Riley County Special 10-year Tax
(Roads & Eco Devo - exp. 2022)
0.50%
City Special 10-year Tax
(Street Maintenance - exp. 2027)
0.20%
City Special 10-year Tax
(Parks and Rec Quality of Life - exp. 2028)
0.25%
TOTAL 8.95%
Pull Factor

Example of increased sales taxes spent on taxable goods if the 0.3% ballot question passes

Annual
Household Income
Ex: 30% of annual income spent on taxable goods Current Sales Tax Rate: 8.95% Sales Tax Rate if ballot question passes: 9.25% Annual Difference in taxes paid
$12,500 $3,750 $336 $347 $11
$25,000 $7,500 $671 $694 $23
$35,000 $10,500 $940 $971 $31
$50,000 $15,000 $1,343 $1,388 $45
$75,000 $22,500 $2,014 $2,081 $67
$100,000 $30,000 $2,685 $2,359 $77
$150,000 $45,000 $4,028 $4,162 $135
$200,000 $60,000 $5,370 $5,550 $180
Sales-Tax-Goods-Tables

Example of increased property taxes to fund the 6 major projects if the ballot measure does not pass

*a 6 mill increase in property taxes would generate approximately $3.3 million in year 1, similar to the 0.3% sales tax.
Appraised Property Value Assessed Property Value Current Property Taxes (Mill Levy) 6 mill increase* Difference
Residential 11.50% 148 mills (City, County, USD 383, State) 154 mills 6 mills
$100,000 $11,500 $1,702 $1,771 $69
$150,000 $17,250 $2,553 $2,656 $103
$200,000 $23,000 $3,404 $3,542 $138
$250,000 $28,750 $4,255 $4,427 $172
$350,000 $40,250 $5,957 $6,198 $242
$500,000 $57,500 $8,510 $,8,855 $345
Commercial 25% 148 mills (City, County, USD 383, State) 154 mills Difference
$250,000 $62,500 $9,250 $9,625 $375
$500,000 $125,000 $18,500 $19,250 $750
$1,000,000 $250,000 $37,000 $38,500 $1,500
$5,000,000 $1,250,000 $192,000 $192,000 $7,500