- Associated Press - Thursday, October 27, 2016

TOPEKA, Kan. (AP) - The Kansas Supreme Court is weighing the legality of a Kansas City suburb’s so-called “driveway tax” in a case that has statewide implications.

The court heard arguments Wednesday about Mission’s approach to raising money for street maintenance, bicycle paths and other transportation projects, the Lawrence Journal-World (https://bit.ly/2eVBSuk ) reported.

A funding mechanism adopted in 2010 bases collections on the number of vehicles coming and going from a property, including homes and businesses. Officially called the “transportation utility fee,” it typically generated nearly $800,000 a year for the northeast Johnson County city of about 9,500 people.

The key issue is whether it’s a fee, as the city argues, or an excise tax. Under Kansas law, cities and counties have only limited power to levy excise taxes, which are essentially taxes on anything other than real estate value or retail sales.

The city argued that it’s not an excise tax, but rather a user fee that is based on the amount of benefit a property owner derives from the city’s transportation network.

A Johnson County judge ruled in the city’s favor in 2013, but the Kansas Court of Appeals last year reversed that decision. Mission City Administrator Laura Smith said the city’s governing body elected not to levy the fee for 2016 or 2017 while it waits for the Supreme Court to resolve the issue.

The legal challenge comes from the Heartland Apartment Association Inc., which represents apartment owners and managers in the state. Attorney Mary Jo Shaney said the TUF “falls readily into the classification of a tax” because it is used to pay for “a classic, traditional function of government.”

The Kansas Association of Realtors and the National Federation of Independent Businesses filed friend of the court briefs in the case supporting the apartment association’s challenge.

Erik Sartorius, executive director of the League of Kansas Municipalities, said he is not aware of any other city in Kansas that levies a transportation fee similar to Mission’s, but he said local governments throughout the state are watching the Mission case closely.


Information from: Lawrence (Kan.) Journal-World, https://www.ljworld.com

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