City sales tax: Streets and museums

Mary Clarkin
mclarkin@hutchnews.com

If there’s a popular tax in Hutchinson, it might be the city sales tax partially dedicated for street and sidewalk repair.

Why, asked an audience member at a Thursday night public forum on the sales tax ballot, is funding for street maintenance “shackled together” with funding for the Cosmosphere and Strataca?

“That conversation does come up,” said City Manager John Deardoff.

Since the quarter-cent sales tax first appeared on the ballot in 1993, at least one museum – initially the Cosmosphere - has been paired with street maintenance as a beneficiary.

About 10 people were in Stage 9 seats at the start of the forum, with more people filtering in to hear Deardoff and Cosmosphere Chief Executive Officer Richard Hollowell and Strataca/Kansas Underground Salt Museum Director Mary Grace Clements. No one challenged the plan to continue giving 47 percent of the sales tax proceeds to street and sidewalk maintenance and 15 percent to property tax reduction.

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A couple of people critically questioned why city sales tax continues to support the Cosmosphere, 11th and Plum, and Strataca, 3650 East Avenue G.

On Nov. 7, Hutchinson voters will vote on whether to continue the quarter-cent sales tax from its slated expiration on March 31, 2019, to March 31, 2024.

“Just because it’s an old tax doesn’t mean it’s a good tax,” said James L. Parker, one of the tax critics at the forum.

Cosmosphere

The city street and sidewalk program has received roughly $1 million annually from the quarter-cent sales tax, and the second major beneficiary of the tax is the Cosmosphere.

Its 33-percent share amounted to about $741,247 last year, according to Hollowell. By comparison, the museum’s net income from its theater was just under $300,000. Retail sales net income was less than $75,000 for the year.

Sales tax revenues are declining and Hollowell expects the Cosmosphere’s share this year from the city sales tax will be about $710,000.

“I don’t plan on it closing,” Hollowell said, if the sales tax question fails and the Cosmosphere loses the source of 16 percent of its revenue.. However, he said, it would affect the number of people they employ and the programs offered.

He later said he was “certain” people would be involved in the cost-cutting if the sales tax ended.

Currently, the Cosmosphere is in the quiet phase of a revitalization capital campaign. President and Chief Operating Officer Jim Remar said $3.6 million has been raised.

Mimi Meredith, vice president of development and marketing, said about $9 million remains to be raised for the capital campaign. She also hopes to raise another $2 million for the endowment, to make the Cosmophere less reliant on the city sales tax income.

Money from the capital campaign is intended to finance changes to the existing Cosmosphere, making it more of an “immersion experience,” Hollowell said.

Improving the Cosmosphere experience will improve revenues, Meredith said.

“One of our goals is to be self-sufficient,” Hollowell said.

The Cosmosphere took slightly more than $10,000 from its foundation, according to Remar, to finance yard signs and other campaign material to promote the sales tax ballot. They hope to raise money to restore that sum to the foundation. Strataca is handling the social media part of the sales tax campaign, Remar said.

Strataca

The 2017 budget for Strataca projects its 5 percent share from the quarter-cent sales tax will translate into $105,500.

That exceeds the estimated $41,000 in income from the Tour de Salt bike ride and 5-K run, combined. But the sales tax revenue stream is dwarfed by the museum’s admissions income. The Safari Shuttle ride income alone is expected to generate more than the sales tax revenue.

Reno County Historical Society is the parent of Strataca and the Reno County Museum. It’s a non-profit, but you still have to run it as a business, said Director Mary Grace Clements, as she spoke at Strataca Friday.

They streamlined the admissions system and continue to hold various events, such as murder mysteries in the mine and overnight camping for Boy Scouts.

Both the Cosmosphere and Strataca draw most of their visitors from out of Reno County. The Tour de Salt had about 167 bicyclists – five from Hutchinson and 11 who drove from Rochester, Minnesota. Other riders came from Iowa, Delaware, Florida and Texas.

The projected attendance of 48,000 this year at Strataca, is not expected to be met. Hoist maintenance effectively sidelined the museum for six to seven days, in late June and early July.

“That was not in our plan, not in our budget,” Clements said. Underground Vaults and Storage picked up Strataca’s half of the hoist maintenance expense, or $6,000. Strataca kept employees on during the shutdown and they worked above ground. The museum offered 20 percent discounts for rebookings by those who had reservations during that period.

In August, a lightning strike in the area was severe enough to knock over a semi-truck and break out windows of vehicles belonging to a couple of employees. That event also affected the budget, because the museum closed for safety reasons on a key weekend day.

Combined, Clements said, the Cosmosphere and Sttataco employ over 120 people during the summer. Over 90 percent of their annual visitors are from outside Reno County, she said, and over 80 percent of the Cosmosphere’s visitors are from outside the county.

Voters

Lehman Brothers filed for bankruptcy in September 2008, and the economic crisis was sufficient to briefly curtail the presidential campaign that fall.

In November 2008, renewal of Hutchinson’s’ quarter-cent sales tax appeared on the ballot. It passed with about 72 percent of voters supporting it. It was the third victory for the sales tax since the first election in 1993. Voters in 2008 gave it the widest margin of victory.

Putting a sunset date on the tax, said Deardoff, requires those receiving the revenues to provide a justification when it comes up for renewal.