City sales tax continues to climb




Garden City collected nearly $5.87 million in sales tax in 2013, a 6.17 percent increase over sales tax collected the previous year, and the third year in a row of strong collections.

Sales tax collected in 2013 equaled $5,867,566. The city collected $5.52 million in 2012, which itself was a 5.44 percent increase over the $5.24 million collected in 2011.

The city also receives a share of sales tax revenue from Finney County's county-wide sales tax. The county-wide tax is split between the city, county and Holcomb based on population and mill levy. Garden City gets about half of the county-wide sales tax, the county about the same amount and Holcomb a small portion, according to City Finance Director Melinda Hitz.

Garden City's half of the county-wide tax totaled $2.55 million in 2013, a 7.94 percent increase over the $2.36 million generated in 2012.

The city normally plans its annual budget using a flat or small sales tax estimate. Any funds received over that budget estimate are used to prepare future budgets.

Hitz said the city used a flat number for sales tax revenue when preparing the 2014 budget last year. Using the 2012 actual sales tax revenue of $5.525 million as a base, the city projected a slight increase for 2013 revenue.

"We've already planned our budget for 2014, so our cash balance is going to be higher going into this year than we anticipated, which should help us out in our 2015 appropriations," she said.

It's unclear how much impact the opening of the Menards store last year had on sales tax receipts, though it likely played some role. The store opening also may have sparked interest in more potential shoppers in the region to come check out Garden City.

"I actually think we're probably drawing from a bigger area than we have in the past," Hitz said. "I've heard we've been getting some from up north — Oakley, Hays — we're seeing some of those tags in our parking lots that we normally haven't seen before. We are seeing some activity."

Overall, the city took in $500,000 more in sales tax revenue in 2013 from both city receipts and the county-wide receipts.

Matt Allen, city manager, said those additional funds over projections go into cash carryover and essentially wait to be appropriated as part of the city's 2015 budget.

"Sales tax directly benefits the city's general fund. It and property taxes are the two biggest revenue streams into the general fund. As the demands on those services grow, less is required from either growth in overall community valuation or growth in the mill levy," Allen said.

In other words, any revenue above and beyond projections will have a direct positive impact on the general fund for 2015. The more sales tax the city brings in, the less property tax the city will need to come up with in the budget.

"Whatever that number is, it will absolutely help the 2015 budget preparation," Allen said.

Randy Partington, county administrator, said in general, when sales in the city are good it also benefits the county's sales tax revenues.

"We both have a similar sales tax. Over 95 percent of sales are in the city, so if theirs is up, ours probably will be, too," he said.

Partington said the county also uses conservative estimates for sales tax revenue when preparing its budget each year. Additional revenue that comes in higher than projected provides a reserve that can be used in future years to keep property taxes stable.

"We try to keep it relatively flat so we have a healthy cash balance in case lower assessed valuations happen in a budget year. That can kind of help cushion a decrease in valuation so we can keep the mill levy flat," he said.

Overall, people buying goods and services within Garden City pay an 8.3 percent sales tax, and purchases outside the city limits are charged 7.3 percent sales tax. The state collects 6.15 percent, reduced last year from 6.3 percent; Finney County has a 1 percent tax; and Garden City collects a 1 percent city tax and 1 percent county-wide tax. Another .15 percent is tacked on to both city and county sales for the HorseThief Reservoir management project.

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