When Johnson County commissioners ditched a plan for a mill levy increase last month, they took a leap of faith.
They accepted Statehouse projections — rather than those from county staff — about the impact of the phase-out of the mortgage registration fee.
Now the commission has learned the money coming in from the fee is down significantly over last year, even before the Kansas Legislature’s new filing fees go into effect.
The revenues from the mortgage registration fee are down $2.1 million from 2013, about a 25 percent decline, according to the second quarter financial report from county treasury and financial management planners. At the year’s midpoint, about $6.2 million has been collected, the report said. That is behind the pace needed to meet the $17.7 million the county had expected by the end of the year.
The decline is matched by a downturn in the number of mortgages registered in the first half of the year. Through June of last year, 17,481 mortgages were recorded. In the same period this year, only 10,560 were, a decline of about 40 percent.
It is uncertain whether the apparent slowdown will continue at the same rate through the end of the year. But the numbers gave Commissioner Steve Klika pause.
“This isn’t off to a real good start when we’re already behind the eight ball,” he said at commission’s meeting last week.
He added later, “Are we looking at a $4 million hit by the time December comes and then the unknown with the new process? That just makes me a little bit nervous.”
The mortgage registration fee, a closing cost that has been based on the amount borrowed, is to begin a five-year phase-out starting in January. Some of the lost revenue will be replaced by increases in per-page filing fees.
County and Statehouse officials have been unable to agree on how much the phase-out will cost Johnson County. Commissioners protested the phase-out when it was first proposed. County staff calculated it could cost the county $49 million over the next five years. The new, higher filing fees are not likely to help much, said county financial planners, because home buyers will likely file fewer pages to save money.
But Johnson County legislators argued that the loss would be closer to $20 million and that the number of pages filed probably wouldn’t change much because federal loans require the pages to be filed.
The mortgage registration change was the main reason the commission gave preliminary approval to a property tax rate increase for 2015. It would have been the first since 2006.
The county commission backed down from the mill levy increase in the end. Commission Chairman Ed Eilert said the impact is still a question mark, but the county would give it some time to work.
The treasurer’s report did not give a reason the mortgage filings are down for 2014. Klika wondered whether home sales have slowed down, “which is telling me our economy in Johnson County isn’t picking up as much as we had hoped or anticipated.”
However, Commissioner Jim Allen said it might be because there is less refinancing of home loans now that interest rates have remained low for a long time.
In other action, the commission approved alcohol consumption for some library-sponsored events at the Central Resource Library.
The county library board asked for permission to serve alcohol at fundraising events with its foundation. Alcohol is allowed for similar functions at the county museum and parks, said County Librarian Sean Casserley. The alcohol would be in areas isolated from the main public areas of the library and the stacks, he said.
The commission approved the request 6-1, but only after some reassurance. “In some corners the subject of alcohol in public spaces could be a sensitive one,” said Commissioner Michael Ashcraft. He asked Casserley for reassurance that children at the library would not be exposed to alcohol use.
Commissioner John Toplikar asked similar questions when the measure came up for initial consideration the week before.
“Will the key to the liquor cabinet be kept away from the children?” he asked.
He also wanted it on record that a library patron could not “walk in with an opened bottle and start reading or researching.”
Casserley said that would be forbidden under library rules.
Klika voted no because he said he makes a mental connection between libraries and schools. He said library events with alcohol could be held at other locations.