Overland Park Council votes to add property tax increase to 2017 budget

Saying they’ve been backed into a corner by a state-imposed tax lid, the Overland Park City Council voted to include a property tax increase in its 2017 city budget.

The council voted Monday night to raise revenues by about $3.1 million to pay for more police positions and reconstruction of the city’s aging streets. The increase would be achieved through a mill levy increase of about 0.96 mills.

The budget won’t be final until after the council hears from the public on Aug. 1. The final vote is scheduled for Aug. 15.

Some council members said they would have preferred to raise the funds incrementally. But they felt pressured by the impending state law that requires future property tax increases beyond the level of inflation to go to a public vote.

Council member Terry Goodman said he was troubled by the increase, which is on top of a 7.5 percent increase in assessed property valuation. He delivered some stinging criticism of Topeka lawmakers who approved the 2018 tax lid on local governments despite the state-level budget problems the past two years.

“They basically said the city of Overland Park doesn’t know what we’re doing,” he said, adding that the city has had a good record of balancing its budget without “smoke and mirrors.”

“There must be some kind of pill they take when they get (to Topeka) that says ‘we now know best. We’re the smartest people in the land,’” he said of the lawmakers.

The council had been considering a 2017 budget that would have kept the tax levy unchanged at 12.848 mills. That budget included operating funds of $209 million, a six percent increase from the previous year.

The increase would bring the city’s mill levy to 13.808. A mill equals $1 of tax per each $1,000 of taxable value.

The additional money would add $455,000 for six more police positions to the additional four already proposed.

The public works department would get $2.6 million to essentially double the rate of street reconstruction, from the current one lane mile per year to two. City Manager Bill Ebel said that some of the city’s neighborhood streets are close to their life expectancy and need a bigger reconstruction than the occasional chip-seal.

Not addressing that problem will cost the city more, he said, because they will need more frequent repairs and will deteriorate faster.

Council members who had hoped to take a more gradual approach expressed frustration with the legislature for the pressure the tax lid has put them under. They said much of the tax lid law is unclear or still in flux, and the uncertainty has forced them to consider taking action sooner, because future revenue-raising options might disappear.

“What has happened is the state has put handcuffs on us, essentially,” said council member Dave Janson. “I don’t think we have a choice. It’s my thinking that we have a lot of needs out there and we’re going to continue to grow.”

Sluggish sales tax revenue had council members concerned as they began considerations of the budget this year. But at Monday’s meeting, some held out hope that property tax rates could be rolled back if the picture turns rosier this year.

One big question mark was whether voters will approve a quarter-cent countywide sales tax increase to build a new courthouse.

If that happens, part of those revenues will go to cities.

Overland Park’s share would be about $4 million a year. Since that vote doesn’t happen until November, none of that potential revenue could be included in this year’s budget estimates.

Council member Curt Skoog said residents should not get the impression the council is afraid to take tax increases before the voters.

“It’s important we at least give the public the opportunity to comment on it,” at the public hearing, he said. “The assumption that if we vote for this it’s because we’re afraid of taking it to the voters is completely wrong and I think it’s important to dispel that. The question really is if we take it to voters there’s a cost every time.”

The 2017 budget includes the first stormwater utility increase since the tax was instituted in 2001.

The increase would pay for $5.5 million in curb replacements, and would boost the yearly cost to homeowners on an averge home worth $250,000 from $52 to $58.

The council set the budget for public hearing on a 9-3 voice vote, with Goodman and council members Paul Lyons and Jim Kite voting against it.

This story was originally published July 12, 2016 at 2:10 PM with the headline "Overland Park Council votes to add property tax increase to 2017 budget."