Not all merchants located in Wichita’s Community Improvement District program are displaying the required signage.
CIDs are a creation of the Kansas Legislature from the 2009 session. They allow merchants in a district to collect additional sales tax of up to two cents per dollar. At the time CIDs started forming, I and others suggested that the city require signage notifying shoppers that they would be paying an additional sales tax, and at what rate.
Not everyone thought that would be wise, according to discussion at a Wichita city council meeting. Informing shoppers as to the actual rate of extra tax would be, according to Council Member Jeff Longwell (district 5, west and northwest Wichita) confusing.
Council Member Sue Schlapp said that transparency is vital for government, but evidently not always, she argued: “This is very simple: If you vote to have the tool, and then you vote to put something in it that makes the tool useless, it’s not even any point in having the vote, in my opinion.”
A representative of a group wanting to establish a CID told the council that developers do not “have any interest in hiding something from the public, or keeping citizens from having full knowledge about these community improvement districts.”
But he added that the retailers they are trying to bring to Wichita would be discouraged by full disclosure of the extra sales tax that citizens would pay in their stores. “We want to make sure that anything that we do, or anything that we implement within a policy is appropriate and will not counteract the very tool we’re creating here.”
The compromise that emerged is a small sign that states “THIS PROJECT MADE POSSIBLE BY COMMUNITY IMPROVEMENT DISTRICT FINANCING” along with a reference to the city’s website to learn more, as explained in the city CID policy document.
That website, www.wichita.gov/CID/?, has information and maps of CIDs, but there’s no way to learn the names of stores in the CID, except for a few cases where the district is named after a merchant. (The city’s site also has broken links, dating from the redesign of the city’s website.)
Examination of merchants in Wichita’s CIDs found two examples of merchants not displaying the signs. Drury Plaza Hotel Broadview and Fairfield Inn at Waterwalk display no signs. Cabela’s displays the signs and is in compliance, but the design of these signs makes them difficult to see.
The city’s policy document regarding these signs doesn’t specify penalties for non-compliance, but that continued failure to comply would result in nonpayment. When asked about the missing signs, city staff said they will investigate and take corrective action.
Curiously, the new CVS drugstore in east Wichita displays the CID signage, but based on purchases made, the store isn’t collecting the CID tax it is entitled to collect.
Slideshow: Wichita CID signs.
If one were to plot all of the current CID locations on a Wichita map with retail merchants that are mandated by city council ordinance to collect an increased sales tax from their customers, an extra sales tax that is diverted back to the project developer’s pocket, Wichita would look like it had the measles. This type of “checkerboard” taxation is patently unfair to the retail customer’s who are “stuck” with paying the extra tax; particularly if they receive no notice of the increased sales tax prior to making their purchase decisions.
Perhaps it is time to have standard signage requirements added to the K.S.A. for CID’s so that consumers have full knowledge of the sales tax rate and that a portion is eco devo before they complete their purchases in one of those districts. Patchwork tax districts are deceptive to consumers. Clear standard signage would level the playing field a bit.
Jim, that would be in consumer’s best interests. If you read the comments of those who were against signage, they seem to be saying disclosing the extra tax rate would deter customers. Thus, a question is begged; do you want to use an economic development tool that consumers would reject if they were fully aware of it, or do you just want to slip that tool in below the radar?
Jim, legislative action seems appropriate in this particular issue since the City continues to be non-compliant. It is not unusual for City staff to provide legal interpretations of ordinances that are contrary to the rule of law.
Another issue that needs attention at the local level is ethics and maybe amending the state ethics statutes t0 incorporate local elected officials (City, County and School Boards). would prevent some of the stuff that goes on at the local level with developers buying votes on the elected bodies. KSA 75-4301 has too many loopholes; lack definitions; and the amounts of $$$ are too high.
It has been my experience that the employees of businesses in CID’s aren’t aware of the extra tax and don’t know how to properly explain the higher amount to a customer inquiring.
If they don’t know about the tax, how can they charge more than the state/local regular amount. I think those people are lying.
Why stop there Jim? Why not make every business display the total sales tax rate being applied? It varies from community to community and county to county.
Perhaps we should also legislate that the they should display the total property tax rate so consumers can evaluate and determine if what the total tax burden is of any business. There are hundreds of property tax districts including schools, cities, counties, improvement districts, etc.
The bottom line is consumer buying behavior is determined more by convenience than anything else. Bob, John, and others are making an issue where none exists.
Passing more regulations doesn’t do anything but create the need for more government to enforce them or they don’t get enforced.
Let’s go after the sales tax on Internet sales. That would be something worth doing.
I tried to buy merchandise at the CVS on the east side, and if you use a credit card the 8.15% flashes on the display. You can tell easily that they’re charging it. Of course that assumes you actually pay attention and actually know about it. The little sign on the door is cryptic indeed – while it’s there it doesn’t say anything about extra taxes, so only the initiated will know that’s its significance. The whole process is corrupt – city bribing merchants with the opportunity to lie about their prices to consumers. The clerk could not give a clear explanation when I asked. I walked away from my purchase and told her I won’t be back. I do not patronize businesses that lie about their prices. If they aren’t honest about pricing, what else do they lie about?