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Examiner
  • Jeff Fox: Where do sales taxes go?

  • The math: One calzone the size of a football and one bottomless Coke, $9. OK. Sales tax, 98 cents. Not so OK. That’s a sales tax rate of 10.88 percent.

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  • The other night I was headed for a meeting and had just enough time for a quick bite as I looked over the agenda and other materials.
    I ducked into one of my favorite places, d’Bronx, for a calzone and a Coke. I handed the cashier a ten and got back two pennies.
    OK, it’s in a mostly hip part of Kansas City, so what do you expect? But something didn’t seem right.
    The math: One calzone the size of a football and one bottomless Coke, $9. OK. Sales tax, 98 cents. Not so OK. That’s a sales tax rate of 10.88 percent.
    In addition to state and county taxes, there are various Kansas City taxes, and this business is in a community improvement district. Thus 98 cents on my $9, not-good-for-me, not-good-for-my-wallet dinner.
    David Warm, executive director of the Mid-America Regional Council, has been doing some thinking about sales taxes, too. The Missouri General Assembly is considering putting on the ballot a one-cent statewide sales tax for transportation – mostly to rebuild I-70 – and the Greater Kansas City Chamber of Commerce asked him for some background.
    So how do different cities across Missouri and Kansas compare?
    “Actually, it’s really complicated,” Warm told the MARC board Tuesday.
    State and local governments, he pointed out, rely heavily on sales taxes, for everything from general services to specific funds for crime, streets, parks and more. Jackson and Clay counties have one for the zoo. Johnson County has one for a research triangle.
    Warm’s staff’s analysis did turn up this tidbit that might surprise some: Overall, Kansans generally pay about 2 cents on the dollar more in sales taxes than Missourians do. The bigger point is that leaders in both states are reluctant to impose or raise new taxes.
    “I think both Kansas and Missouri are decidedly low-tax states. ... In particular, MIssouri is a low-tax state,” he said.
    There are exceptions, and not just on calzones. In parts of downtown Kansas City, the rate is 10.35 percent but – tourists beware – 12.35 percent on prepared food and 17.85 percent on a hotel room. Warm cited a recent news report that put Kansas City among the five cities with the highest hotel taxes in the country. That’s roughly 10 percentage points higher than what you’d pay at the nicest hotel in Independence.
    MARC listed a variety of metro cities suggesting the higher-in-Kansas idea is correct: basic rates of more than 9 percent in Mission and Gardner, 8.9 percent in Lenexa, 8.65 in Leawood, Olathe and Overland Park, 8.35 in Kansas City, Mo., 8.225 percent in Lee’s Summit, 7.975 percent in Grain Valley, 7.725 percent in Independence, Liberty and Gladstone, and then – way down the list – 7.475 percent in Blue Springs.
    So what about another penny for I-70? The idea has movement in the General Assembly, though the Kansas City chamber ultimately did not endorse it.
    Page 2 of 3 - “I would say in the Kansas City area it’s been met (a) with lukewarm reception,” Warm said.
    Get in shape
    Planet Fitness has opened what it calls its flagship on the east side of the metro area.
    It’s at Noland Road and U.S. 40, next to Hy-Vee in the old Ace Hardware site. The company has locations in Blue Springs – also next to Hy-Vee – and Raytown. In Independence, it offers 120 cardio machines such as treadmills, ellipticals and stationary bikes.
    The company stresses two main marketing points: membership is $10 a month, and its gyms are “judgment-free zones.” Put another way, the aim is to be affordable and not intimidating. Although relatively new to the Kansas City area, the company has more than 500 locations nationwide.
    Consumers spending
    Remember how the economy was supposed to be poking along but perhaps slowing in the months ahead? Sequestration? An end to the two-year and rather modest cut in payroll taxes? Monsters under the bed? Pick your cause and effects.
    Here in the Midwest, the Federal Reserve suggests, consumers have shaken that off. Consumer spending was stronger than expected in March, and the regional economy in the area from western Missouri to Oklahoma and Wyoming expanded moderately, according to the latest “Beige Book” report by the Fed.
    Here’s the part to underline for your kids: Although wages aren’t going up generally, in this region “some companies, particularly those recruiting workers with specialized skills such as engineers, software developers, and commercial truck drivers, were increasing salaries,” the Fed says. Stay in school, kids.
    The report, covering late February through early April, turns up consistently upbeat news for the prairies-and-plains region that falls under the Federal Reserve Bank of Kansas City:
    • More companies say they plan to add workers in the months ahead, though wages are not rising.
    • Auto sales are up, especially for smaller cars and used cars.
    • Hotels are fuller, though rates are down. Restaurants are selling more meals.
    • Homes are selling well. “Low- and mid-priced homes in good condition continued to sell quickly,” the KC Fed says.
    Housing starts are up – area Realtors and homebuilders confirm that – although “some builders noted that a lack of available sub-contractors could constrain construction.”
    • Manufacturing softened in March but “was expected to rebound in the coming months.” Also, high-tech firms said they are doing better.
    • Farmers’ crops are hurting – the drought had hammered with winter wheat crop – but government payments to farmers are helping a lot.
    A lot of this is about autos and homes, two traditional drivers of the U.S. economy. The Home Builders Association of Greater Kansas City says permits issued to build single-familly homes were up 30 percent in the first quarter of 2013 across eight metro counties – though that figure is minus 3.1 percent for Eastern Jackson County. Most of the growth has been in Johnson County, which is up 63 percent. Almost half of the 832 permits taken out in the quarter were in Johnson County. Eastern Jackson County accounted for 11 percent of the total.
    Page 3 of 3 - Also, all nine metro counties surveyed by the Kansas City Regional Association of Realtors and Heartland Multiple Listing Service saw higher prices for existing homes in March, compared with March 2012. The area was up 5 percent – to $151,140 – and Jackson County saw a similar increase, reaching $116,930. Existing-home sales accounted for 91.5 percent of the homes sold in March in the area, and those sales were 7.3 percent higher than a year ago.
    The average new home in the metro area sold for $336,18 in March, up 6 percent in a year. In Jackson County, that average was $279,941, off 4.3 percent.
    Jeff Fox is The Examiner’s business editor. Reach him at jeff.fox@examiner.net or 816-350-6313. Follow him in Twitter @FoxEJC.
     
     

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