‘A good oops for you’: Johnson County city’s $1 million error will lower property taxes
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The Merriam City Council this summer lowered the city’s property tax rate for the first time in 25 years. But homeowners will end up with more savings than the city bargained for.
Homeowners will see much lower property taxes than expected next year, officials said, due to a clerical error that is costing the city more than $1 million.
The city sent out postcards notifying residents of the issue after administrators made a mistake submitting budget documents to the county and state. The postcard to homeowners reads, “It’s a good oops for you,” as the city says the blunder resulted in a lower tax rate.
Earlier this year, council members voted to lower the city’s property tax rate with a .25 mill levy decrease. But due to the clerical error, the city’s budget documents show a much larger 4.48 mill levy rate reduction, officials said.
As a result, for the average $281,000 home, owners will save about $145 in property taxes. That homeowner would see a $740 property tax bill, rather than the expected $885.
“When we tried to fix the mistake, we were told it was too late to change anything due to county and state budget process timelines. The lower mill levy rate will stay in 2024,” city spokeswoman Jenna Gant said in an email.
City officials said the mistake happened while submitting the budget when staff used a new form regarding special financing districts with tax incentives. A large portion of the Interstate 35 corridor in Merriam is part of a tax increment financing district, for example.
“Revenue for special financing districts is usually accounted for in a different part of the budget than regular revenue, but with the form we used, it should have been calculated together, and it wasn’t,” the city says on its website. “Therefore, the total property tax revenue that was calculated was incorrect. We were focused on making sure the decreased mill levy rate number was correct on the form and we missed other needed updates.”
The city is taking it on the chin, acknowledging that the error means a loss of more than $1 million in revenue. The budget estimates $37 million in operating revenue, with $5 million of that coming from property taxes.
“The missing property tax revenue in 2024 will strain our budget, but due to some cost savings in 2023, deferred capital outlay purchases and adequate reserves, we believe we can maintain service levels for the year,” officials said.
The city, officials said, will need to adjust the property tax rate to maintain services, meaning residents shouldn’t expect to see such large savings beyond next year.
“Based on common-sense projections, maintaining the service levels our residents deserve and expect will be impossible at the 2024 mill levy rate. We don’t know how much the mill rate will need to increase, but it will need to be increased unless service levels are to be reduced.”
This story was originally published November 22, 2023 at 12:23 PM.
