Economic Recovery and Relief 2023 Sales Tax

A retail sales tax question of 0.5% will be on the November 3, 2020 ballot in Manhattan.

The ability to collect the 0.5% dedicated sales tax within the entire city limits of Manhattan, including the Pottawatomie County portion east of Tuttle Creek Boulevard, would increase annual revenues from $3 million to $6.5 million allowing the city to put more money toward jobs, reducing the property tax burden, and workforce housing initiatives.

If the sales tax is adopted - effective January 1, 2023 to December 31, 2032

Upon expiration of the 2012 Riley County 0.5% sales tax on December 31, 2022, and if the City of Manhattan Economic Recovery and Relief 2023 passes, the sales tax rate in Riley County would remain at 8.95% and the sales tax rate in Manhattan City Limits within Pottawatomie County would increase to 9.45%.

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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.

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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?

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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. 

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Economic Development

Twenty percent of the sales tax revenue - estimated at $13 million over the 10 year period - would be dedicated to job creation. This would include recruitment, retention, and expansion of businesses in Manhattan.

The Manhattan Area Chamber of Commerce economic development strategy:

  1. Economic Diversification
  2. Talent Sustainability
  3. Entrepreneurial Dynamism
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Workforce Housing

$6.5 million towards workforce housing initiatives. Without housing options, it will be difficult to recruit and retain talent for new businesses. 

If the sales tax passes, Manhattan will have the time and opportunity to develop a housing plan to identify the needs of homeowners and renters and the shortfalls in the current housing situation.

The City Commission has expressed the desire to create a Housing Advisory Board for this purpose. 

On the Ballot - November 3

Ballot Question

COVID-19 Relief

If the sales tax passes, it would allow the city immediate flexibility to use more of the current economic development funds available to help with COVID-19 impacts to businesses

City Commission Resolution

On August 18, 2020, the City Commission passed Resolution No. 081820-E calling for a special question for a 10-year, 0.5% sales tax to be placed on the November 3, 2020, general election ballot for the City of Manhattan. If passed, the sales tax would go into effect January 1, 2023. This would coincide with the expiration of the Riley County 0.5% Economic Development/Road & Bridges Sales Tax passed in 2012.

Questions?

City staff is available upon request to speak to any local groups (in person or virtually) interested in learning more about the Economic Recovery and Relief 2023 Sales Tax. Please contact the City Manager's Office at (785) 587-2404 to schedule a speaking engagement.