When they met Tuesday, Leavenworth city commissioners discussed a possible referendum for a sales tax increase with the idea of using the revenue to reduce property taxes.

When they met Tuesday, Leavenworth city commissioners discussed a possible referendum for a sales tax increase with the idea of using the revenue to reduce property taxes.

The four commissioners in attendance expressed support for the idea, but no final decision was made during Tuesday's study session. Commissioners are expected to discuss the issue again in about a month.

A sales tax increase in the city would have to be put before voters for approval.

Commissioners began discussing the possibility of proposing a sales increase for the purpose of reducing the city's mill levy earlier this summer as they reviewed the city's budget for 2014.

The mill levy is a rate used for assessing property taxes.

For Tuesday's meeting, City Manager Scott Miller provided commissioners with the 2013 property tax rates for the cities in Kansas that are designated to be first-class cities. Of the more than 20 cities, Leavenworth has the second highest mill levy.

Leavenworth's total mill levy is 51.841. The only first class city in Kansas to have a higher mill rate in 2013 is Atchison, which has a mill levy of 52.935.

Miller also provided commissioners with information about sales tax rates for cities in Kansas. He said he averaged the sales tax rates for the cities in Leavenworth, Wyandotte and Johnson counties as well as the city of Atchison. The average is 8.598 percent. The city of Leavenworth's sales tax rate is 8.15 percent.

Miller said a half cent sales tax increase would generate an estimated $1.824 million. This would be equal to 9.368 mills under the city's current assessed valuation.

Mayor Pro-Tem Mark Preisinger said Leavenworth has an extremely high property tax rate and an extremely low sales tax rate for the area.

"Our taxation rate in this city is out of balance," he said.

Preisinger proposed the idea of a sales tax increase for which at least 75 percent of the revenue is used to directly reduce property taxes.

He used an example of a 1-cent sales tax increase. He said the remaining 25 percent of the revenue from the sales tax increase could be put into the city's general fund or something else.

"I think we could sell a 1-cent sales tax in the city of Leavenworth," he said.

He said one problem that could result from such a ballot question may arise in a couple of years when voters are asked to renew a countywide sales tax. He said asking voters to approve a sales tax increase now could impact their feelings about the later ballot question.

Commissioner Larry Dedeke said he agrees that property tax relief is needed. He feels a sales tax increase would pass if it's explained correctly.

Dedeke said he has no fear about the renewal of the countywide sales tax in a couple of years. He said people will be able to see what's been accomplished with the tax.

Dedeke also supported the idea of putting a quarter of the revenue from a sales tax increase in the city toward the general fund instead of using all of the money for property tax reduction.

He said putting some of the money in the general fund will avoid a budget fight every year such as the one commissioners faced this year. Commissioners and other city officials had to identify multiple cuts to avoid a mill levy increase in 2014.

Commissioner Davis Moulden said he doesn't believe there's any worse tax than a property tax. And he would always support a sales tax over a property tax.

Mayor Laura Gasbarre said she was supportive of the idea of a sales tax increase.

"I think it's equitable," she said. "It's fair."

However, she expressed concern about the idea of putting a portion of the money into the general fund or somewhere else. She said it is best not to muddy the water, and she supports proposing that all of the revenue be used to reduce property taxes.

Finance Director Dan Williamson said he feels commissioners will be on pretty safe ground if they limit the use of the revenue from a proposed sales tax increase to only property tax reduction.

If other things start being included, commissioners may run into difficulties, Williamson said.

He said voters may see this as a grab for money.

Miller said the key is putting together a rock solid referendum that will pass.

"Because you basically get one shot at this," he said.

He said if a sales tax increase doesn't pass in the spring, it will be difficult to bring it back later in the year and have it passed.

He said people may question what money placed in the general fund ultimately will be used for.

"That uncertainty may cause a person to vote no," Miller said.

Commissioners agreed to discuss the matter again during a study session in September.

One commissioner, Lisa Weakley, was absent Tuesday.