Economic Recovery and Relief 2023 Sales Tax

On November 3, Manhattan voters passed a ballot measure to adopt a 0.5% Economic Recovery and Relief sales tax.

Riley County’s unofficial final report indicates 11,138 (YES) Manhattan residents for and 7,212 (NO) voted against the measure.

“It was important to ask the tax question early in order to allow for more opportunity to help with pandemic recovery initiatives. This frees up previously pledged funds to be held in reserve to pay future financing obligations on substantial infrastructure and economic development related projects.” said City Manager Ron Fehr. “Seeking responses by our local citizens in a high voter turnout election was very important. We look forward to working with the community and our community partners moving forward.”

The sales tax will take effect on January 1, 2023 and remain in effect for 10 years. The new City-wide 0.5% sales tax is anticipated to coincide with the expiration of 0.5% Riley County Sales that will sunset on December 31, 2022. The new 0.5% city sales tax will be levied within the entire city limits of Manhattan, including those portions of the City within Pottawatomie County.

Current Sales Tax Info

The City of Manhattan currently receives 61% of the annual proceeds from the 2012 Riley County 0.5% Sales Tax, or approximately $3 million annually. Of the City's $3 million annually, approximately $1 million goes directly toward debt to reduce the property tax burden, and the remaining $2 million is dedicated toward infrastructure and jobs. The remaining proceeds are retained by Riley County for roads and bridges projects outside of city limits.

Purpose of Economic Recovery and Relief Sales Tax

Sales tax proceeds would be used for following purposes based upon the language defined in the resolution & special question that will be on the November 3 ballot for Manhattan voters:

Reducing the ad valorem property tax burden on City taxpayers
Stimulating the economic recovery from the COVID-19 pandemic
Paying for public infrastructure projects related to quality of life and economic development
Economic development initiatives intended to recruit, retain and grow jobs
Workforce housing initiatives

How would the tax revenue be spent?

Debt Repayment

If passed, the estimated $45.5 million generated over 10 years could be devoted to the City's Bond and Interest Fund to pay down debt. Using sales tax revenue for this purpose would save property owners the equivalent of 7.677 mill levy in property taxes each year.

Infrastructure Projects

Infrastructure projects and improvements would be focused on areas to help the community prosper - more jobs, more opportunities for commerce and businesses to flourish, and creating a more inviting and appealing environment for all.