Lawrence voters will soon decide whether to approve a sales tax increase that would add 1 cent per $20 spent in order to fund affordable housing and homelessness services.

It’s the second of two questions on Lawrence voters’ ballots in the Tuesday, Nov. 5 general election.

The other ballot question is about the city’s form of government. You can read all about that at this link.

Here are some FAQs about the sales tax, what it would cost you, and what it would fund.

Jump to a question:

• What would the sales tax increase cost me?
• How did this sales tax come about?
• What is the current affordable housing sales tax?
• What does the ballot question say?
• What would the sales tax increase pay for, and how would the funds be split?
• The question says this would ‘repeal’ the current affordable housing sales tax?
• What does ‘affordable’ housing mean, anyway?
• How has Lawrence voted on other sales tax questions?
• What are people saying about this vote?

What would the sales tax increase cost me?

That depends entirely on how much money you spend in Lawrence. On a small scale, it would add one penny per $20 spent.

For every $100 worth of purchases, the increase would add an extra nickel. For every $1,000 you spend, it would add an extra 50 cents.

One family of Times readers did the math and determined that with their monthly food budget of $600 and monthly entertainment budget of $500 per month, the added sales tax would amount to less than $7 extra per year.

Even if the increase does pass, it would be far offset as the state sales tax on groceries drops to 0% starting Jan. 1, 2025. The current rate is 2%, or $2 per $100 spent.

How did this sales tax come about?

The sales tax proposal was included as part of Lawrence City Manager Craig Owens’ recommended budget for 2025.

Unlike property taxes, Lawrence city commissioners have to ask voters to approve any new sales taxes or increases to them. Commissioners in August voted 5-0 to put the sales tax question on voters’ ballots for the Nov. 5 election.

The city will no longer have federal COVID-19 relief funds available in 2025, leaving the Homeless Solutions Division budget short about $1.52 million.

“If approved, these funds (we’re anticipating an additional $1.25 million) are anticipated to initially fund Homeless Solutions, including emergency sheltering, outreach and case management,” Owens wrote in a July letter to the city commission accompanying the proposed 2025 budget.

If voters approve the sales tax increase, the Homeless Solutions Division’s budget for 2025 would be $4.72 million, down from $5.26 million. But without the sales tax increase, the division’s budget would be $3.52 million, and the city would have to determine whether to cut homelessness services or make cuts elsewhere to compensate.

What is the current affordable housing sales tax, and how is it used?

City residents in November 2017 voted 62% in favor of the 10-year, .05% affordable housing sales tax. It was not a new tax but rather a 10-year extension and repurpose of a sales tax that had previously been used for public transit. In the time since, the funds have gone into the Affordable Housing Trust Fund.

The current tax amounts to one penny per $20 spent — so if voters approve the increase, a total of 2 cents per $20 spent would go toward affordable housing and homelessness programs.

The .05% sales tax is currently set to sunset in 2029. If voters say yes to this ballot question, the increased sales tax would go into effect April 1, 2025 and continue through March 31, 2035.

The Affordable Housing Advisory Board’s seven members hear from nonprofits, developers and more each year to determine how those the money brought in through the sales tax should be awarded. They make recommendations to the Lawrence City Commission, which has the final say. (AHAB currently includes Chair Christina Gentry, Vice Chair Mariel Ferrero, Monte Soukup, Hye-Sung Han, Elizabeth O’Neill, Mark Buhler and Andrew Dalager.)

Through its first five years, the fund has supported the creation of hundreds of new affordable housing units for renters and homeowners; modifying 65 homes for accessibility; making health and safety improvements on 160 units and helping 1,128 residents with vouchers or rental assistance so they can remain housed, according to the city.

Some of the larger projects the fund has supported include Bethel Estates, senior housing near East 25th Terrace and O’Connell Road; Union at the Loop, near 33rd and Michigan streets; and transitional and permanent supportive housing run by Bert Nash Community Mental Health Center.

What does the ballot question say?

Unlike the ballot question about the city’s form of government, which we broke down in this article, the sales tax question states pretty clearly states what voters are approving or not approving.

One use of the funds will be to increase the number of affordable housing units that are available in Lawrence; the other will be to support people experiencing homelessness with emergency shelter and essential needs.

Here’s the full text of the question:

“Shall the City of Lawrence, Kansas be authorized to repeal the 2019 Sales Tax in the amount of five one-hundredths of one percent (0.05%) in the City of Lawrence, Kansas, and replace it with the levying of a new special purpose retailers’ sales tax in the amount of one tenth of one percent (0.1%) for the purposes of (1) providing and improving the quality, availability, and affordability of housing in Lawrence, acquiring land for future affordable housing units, investing in private/public partnerships for the provision of affordable housing, and such other related affordable housing purposes as may be in the best interest of the City, and (2) providing temporary emergency shelter for persons experiencing homelessness and related services including but not limited to providing food, laundry, transportation, storage, non-prescription medical supplies, case management, and outreach services as well as homeless prevention services including but not limited to rent stabilization funding, utility assistance, assistance obtaining government identification cards, government benefits, and such other related programs and services for persons experiencing homelessness as may be in the best interest of the City, the collection of such sales tax to commence on April 1, 2025 and shall terminate ten years after its commencement, all in accordance with the provisions of K.S.A. 12-187 et seq. and amendments thereto?”

What would the sales tax increase pay for, and how would the funds be split?

With no federal COVID-19 relief funds available to the city next year, the sales tax funds would mean continued funding for the Pallet shelter village, the community of 50 cabin-like shelters on North Michigan Street; programs beyond the nightly emergency shelter at the Lawrence Community Shelter; outreach initiatives such as alternatives to police responses, addressing addiction and behavioral health and more of programs that aim to help people find housing and stability.

The shelter operates the Pallet village. If the sales tax increase does not pass, “We cannot speculate on the impact to funding to LCS,” said Cori Wallace, a spokesperson for the city.

The language on the ballot does not explicitly state that funds from the sales tax would be split 50/50 for affordable housing and homelessness services. But city messaging about the tax says it would, and “It is the City’s intent to split the funds equally,” Wallace said.

“However, we think it’s important to note that the City Commission confirms all budget allocations, for this and other programs, through the annual budget process,” Wallace said.

Just as an example, commissioners could choose to spend 70% of the funds on homelessness initiatives and 30% on affordable housing for a year or two; then, as housing projects that are currently in the works and future projects are able to start moving people in, the emphasis could shift toward creating even more affordable housing with a larger percentage of the funds as less money is needed to address chronic homelessness.

“As the need for emergency sheltering diminishes, the additional funds will transition to Affordable Housing projects,” Owens wrote to the city commission in July.

The question says this would ‘repeal’ the current affordable housing sales tax?

Yes, but the rest of the question means it would essentially double it and extend it for another 10 years. Voting yes means the doubled and dual-purpose sales tax would continue into 2035, rather than the current sales tax possibly sunsetting on March 31, 2029.

In other words, the current affordable housing sales tax would continue to exist for at least a few more years if voters say no to this question. The city could continue funding housing projects and programs in the same way it has been since the sales tax went into effect in April 2019.

If voters say no to this question, the city will likely ask voters to extend the current affordable housing sales tax in another question in the November 2027 election.

What does ‘affordable’ housing mean, anyway?

Various projects may have different definitions of “affordable” or may aim to serve people with different levels of income.

You may hear references to “‘Big A’ Affordable,” which means housing that is subsidized for people whose incomes are at or below 80% of the area median income, or AMI. Residents must have their incomes verified in order to live there. These are typically the kinds of housing projects that the city aims to subsidize through the affordable housing sales tax.

The federal Department of Housing and Urban Development determines the AMI for every county in the nation each year — it’s not determined by the city. The current AMI for Douglas County is $66,300 for a household of one; $96,400 for a household of four.

“‘Small a’ affordable” refers to market-rate housing that is attainable for residents without exceeding 30% of their household income — that’s not determined by the federal government, but someone’s individual salary.

If resources like this are helpful to you, please support The Lawrence Times.
Click here to subscribe.

How has Lawrence voted on other sales tax questions?

In the past 10 years, Lawrence and Douglas County voters have narrowly rejected a sales tax increase to fund a new police headquarters (48% in favor, 52% opposed, with 50.3% voter turnout in November 2014) and a jail expansion (47% in favor, 53% opposed, with 41.6% voter turnout in a May 2018 special election).

But city voters have approved renewing sales taxes toward public transportation and infrastructure improvements, and voters throughout the county have approved a quarter-cent behavioral health sales tax.

In that 2017 election, city voters opted to extend for 10 years both a 0.2% sales tax for public transit (70% in favor) and a 0.3% sales tax for city infrastructure (73% in favor). Voter turnout was about 23.5% in that odd-year election in which only city races were on the ballot.

In the November 2018 general election, when Douglas County voters approved the 0.25% sales tax for behavioral health projects with 71% of the vote, turnout was about 62%.

In presidential year general elections, Douglas County as a whole has seen a range from about 62% to 73% turnout between 2008 and 2020. County Clerk Jamie Shew said Monday that in-person early voting numbers are “trending higher than any election right now.”

What are people saying about this vote?

Some community members, including people affiliated with Lawrence Cares and a group of independent advocates, are encouraging people to vote against the sales tax because of concerns about transparency with regard to spending and data on outcomes.

Others, such as people affiliated with Lawrence Tenants and some people who have written letters to the Times, are encouraging people to vote in favor of the sales tax, calling it a a cheap and cost-effective way to support future housing projects that serve everyone in Lawrence and support people who are unhoused.

Here are the letters we’ve received from readers thus far about this ballot measure:

(List updated at 1:20 p.m. Friday, Oct. 25 to add another letter)

Early voting is underway, and polls will be open from 7 a.m. to 7 p.m. on Election Day, Tuesday, Nov. 5. Read more about how to cast your ballot and options to vote early at this link.

Have questions we didn’t answer here? Please get in touch.

Mackenzie Clark (she/her), reporter/founder of The Lawrence Times, can be reached at mclark@lawrencekstimes.com. Read more of her work for the Times here. Check out her staff bio here.

• Twitter
• Facebook
• Instagram
• LinkedIn

MORE …

More coverage of housing and homelessness:

MORE …

Latest Lawrence news:

MORE …