With a glance over their shoulders toward Topeka, Johnson County commissioners on Thursday approved a 14 percent increase in the county’s property tax rate, the first since 2006.
In voting 4-3 for the increase, the County Commission proved itself willing to do what the Kansas Legislature has railed against — raising taxes to support a higher level of government services. Kansas lawmakers have opted for deep cuts in income taxes and services, but still raised sales taxes this year to plug a budget hole.
Supporters of the county’s property tax increase say it is needed to maintain the quality of life that has attracted people to Johnson County and spurred its growth. The increase will go to support expansions and improvements in the library and parks systems, add public transit services and cover an expected shortfall in revenue for county operations.
Although the final voting was done in a series of resolutions, the count and the vote was always the same. The commission split 4-3, with commissioners Jason Osterhaus, Michael Ashcraft and John Toplikar voting against. Commissioners Steve Klika, Ron Shaffer, Jim Allen and Chairman Ed Eilert voted in favor.
Commissioners and taxpayers’ comments at the commission’s meeting Thursday were infused with concern about the tendency of the Kansas Legislature to restrict how much revenue can be raised by local government. Last session, for example, lawmakers approved a tax lid that would not allow local government to generate property tax revenue above the rate of inflation without a popular vote. That law is to take effect in 2018.
As the meeting ended, Eilert spoke of the relationship between the county and state government as “becoming frayed.”
Most economic growth is initiated at the city and county level, Eilert said.
“Don’t put the handcuffs on local government so they cannot respond to those economic opportunities,” he said. “That, I believe, is not in everyone’s best interest.”
The property tax lid, plus a change last year in how county fees are collected for mortgages, has caused friction between the seven-member commission and the county’s statehouse delegation. Last year, state lawmakers showed up at the commission’s budget hearing to speak against a proposed tax rate increase.
The commission eventually backed away and kept the tax rate steady. But comments at the meeting Thursday showed it was not forgotten.
Klika noted that the vote Thursday was basically a continuation of last year’s budget debate. The county kept the tax rate flat throughout the Great Recession, even as home values and revenue shrunk, he said. “We put a lot of things on the back burner the past 10 years. We’ve got to get back on track,” Klika said.
No state legislators took to the lectern Thursday, but the Kansas Policy Institute, a conservative-leaning think tank, ran radio ads opposed to the increase, and its president, David Trabert, had spoken out against it at a previous meeting.
That caught the attention of Barry Martin of Olathe, who referred to the state’s recent struggles to balance its budget when he spoke to the commission Thursday.
“The commission has come under attack by certain special interest groups, the same groups that advise the Legislature and governor, and we know how that’s worked out,” Martin said.
“The fiscal policies that these people support have resulted in the single highest tax increase in Kansas history,” he continued, referring to a decision to raise the state sales tax rather than income tax.
That puts the burden on the middle and lower classes, he said.
“I would say to the persons who don’t support the (county’s) budget, move to another county. Move to Wichita and find out what your property taxes will be there,” Martin said.
In fact, most of the people who stood to speak during the pre-vote public comments were in favor of the tax increase.
Kathy McGinley of Overland Park praised the library system in particular. She told the commissioners: “I am more than willing to pay a little more in taxes to ensure more people in the county have access to this amazing resource.”
Jim Minges of Roeland Park said the increase amounts to an investment in the Johnson County quality of life.
“The cost for me would be slightly more than the cost of a Starbucks latte once a month,” Minges said. “I don’t think that is too much to invest in the quality of our community.”
The increase will bring in new money to take care of some of the county’s higher-profile needs. The park system would get a 0.75 mill increase; libraries, a 0.75 mill increase; transit, a 0.178 mill increase; and county operations would get a 1.622 mill increase. A mill equals a dollar of tax per each $1,000 taxable value.
Both the library and parks recently completed long-range plans for expansion and improvements. Library officials wanted the increase to build new branches to accommodate growth and to make improvements to existing branches. The library also has plans for a centralized sorting center, which officials say would save space and money.
Parks money will be spent partly on making new parkland accessible. Big Bull Creek Park, a 2,000-acre tract, has been a source of controversy because it has never been developed since the county acquired it more than a decade ago. Streamway trails would also be developed and existing parks improved.
The rest of the increase goes toward public transit and county operations. The public transit money will go to expand bus lines and hours and to add more flexibility to para-transit. The county operations budget was increased to cover losses in state revenue from the mortgage registration fee and increases in the sheriff’s budget, among other things.
The total budget is about $928.7 million, with $185.5 million planned for reserves, a 6.8 percent increase in spending.
With the 3.3 mill increase, the county’s 2016 mill rate will come to 26.57, up from 23.27 mills in 2015.
Johnson Countians outside of Olathe would see an increase of $8.26 a month to the average $261,000 home. Olathe’s impact would be less, because its library is not under the county library system. For Olathe residents, the mill levy would increase by 2.55 mills, bringing an increase of $6.38 a month on a home of the same value.
At the meeting Thursday, two people spoke against the budget. Dennis Batliner of Overland Park said a recent citizen survey shows the majority of residents don’t want a tax increase. He said more should have been done to find other savings in such things as employee compensation.
Likewise, Earl Long of Overland Park said the county’s good quality of life has been due to a conservative tax policy over the years that has helped the private sector.
Although Trabert of the Kansas Policy Institute was not at the meeting, he said later that the county presented a “false choice” to voters about raising taxes or cutting services. “The reality is that their budget is spending $30 million-plus more than they spent the year before,” Trabert said. “They could choose to not increase their spending by as much as they were, or they could choose to provide existing services more efficiently.”
Telling residents that without an increase they would “pay the price” in reduced services was inappropriate, he said.
“That’s not an honest discussion,” Trabert said.
Some state lawmakers said they weren’t surprised by the tax increase.
Rep. Melissa Rooker, a Fairway Republican, lamented state-mandated policies that cut into county revenue, saying that local officials must “backfill” that money. She said she supports county officials who studied the levy increase.
Rooker said that while a tax increase might not be something to applaud, the vision to improve library facilities, to expand parks and to improve public transit is laudable.
“I believe our county has been very well managed for a very long time,” she said.
Commissioner Osterhaus made support of the county’s parks and libraries part of his re-election campaign this year. He explained that he voted against the budget because he thought it more appropriate that the measure be put to a public vote. If he’d had the opportunity as a private citizen, he said, he would have voted for it.
Ashcraft and Toplikar said that while they support the library and parks, they thought the county should have taken a different approach. Ashcraft said more cost-cutting measures should have been explored.
Toplikar wanted a referendum vote or a bond issue, which would ensure that the tax increases eventually expire or have to be re-approved.
At one point Toplikar proposed an amendment to reduce the county reserve fund to 17 percent of the budget rather than raise the tax rate. He also asked whether the debate could be delayed so more outside auditors, including Trabert, could take a look at it. Both those proposals were voted down or denied.
The idea of spending down reserves drew fire from some others on the commission. Commissioner Allen said such a move could endanger the county’s bond rating, costing it in increased interest rates down the line. The state of Kansas has already suffered a downgrade in its rating.
“Those incremental differences in interest rates are significant,” Allen said. “If the state of Kansas had the same bond rating Johnson County has, they literally would save hundreds of millions of dollars a year.”