Dear Commissioner Barrick,
I appreciate your desire to help alleviate poverty in our community and support families who struggle with the rising cost of living.
SEE RELATED STORY: Ellis County reports highest poverty rate in region
However, I’d like to share a business perspective that emphasizes the broader economic forces at play. Your suggestion that “It’s really a wage thing. ” is a sentiment many of us share in principle; after all, business owners want their employees to thrive.
But achieving this goal requires a balanced approach that considers the realities of our local economy, tax burdens, and the market forces businesses must navigate.
Businesses don’t have unlimited flexibility in setting wages. We operate in a competitive market where goods and services are sold at prices that reflect what consumers are willing to pay. This is especially true in our community, where discretionary spending is often limited, and businesses must keep prices affordable for customers.
If we raise prices to cover higher wages, we risk losing customers who may seek out cheaper alternatives or travel to nearby communities with lower prices and tax burdens. This delicate balance means that businesses need to price their offerings according to what the market will bear, which directly impacts our ability to raise wages.
I frequently hear complaints about the high sales tax rates in the north Vine improvement district. I recommend that you drive to Salina or Wichita on a weekend and look at the counties on the license plates of shoppers in their retail parking lots.
Another significant issue affecting businesses’ ability to increase wages is the cumulative tax burden imposed by various levels of government. In our city, the property tax rate is 1.2%—a rate higher than the national average.
This, combined with county, state, and federal taxes, creates a substantial overhead for businesses. These funds that go toward taxes are diverted away from potential wage increases, investments in growth, and other improvements that could benefit both employees and the community.
When a business is continually pressed by rising taxes, it has to make difficult choices. Higher taxes lead to lower net earnings, and lower earnings mean reduced capacity to raise wages.
As a community, we should recognize that business owners aren’t unwilling to pay more—they’re often simply unable to do so under the weight of various tax obligations.
Addressing high tax rates at the city, county and state levels could help create more room for wage growth by freeing up resources currently spent on taxes.
Kansas is not ranked very well in comparisons of our peer states regarding effective tax rates. When businesses compete for interstate business, these disparities are significant.
The conversation around poverty alleviation would benefit from a closer look at government spending. Each level of government has certain responsibilities, but when spending is inefficient or inflated, it places an unnecessary burden on taxpayers, including businesses.
Taxpayer-funded programs and initiatives should be periodically assessed for cost-effectiveness and efficiency. By making government operations more efficient and cutting back on excess spending, our city could potentially reduce taxes, allowing both residents and businesses to keep more of their earnings.
This, in turn, could create a healthier economic environment where businesses are better positioned to increase wages.
To address the complex issues surrounding poverty and wage levels, we need a collaborative approach. Rather than focusing solely on businesses, let’s consider a plan that evaluates tax policy, government spending and economic growth initiatives in tandem.
Incentives for businesses, reduced tax burdens and supportive infrastructure can help local businesses thrive, which would put them in a stronger position to provide higher wages and better opportunities for employees.
Together, we can create a sustainable, long-term solution that promotes economic prosperity and benefits the entire community.
Thank you for your consideration of these points. I look forward to working together toward solutions that help both our businesses and residents succeed.
—Mark Hess,
vice president of sales & services
Hess service