Tax cut could yield same revenue
Cut tax rates but generate the same amount of money. Or keep the mill rate the same and have more tax money to spend.
That’s the confusing but enviable dilemma county commissioners will attempt to resolve next week as they prepare their 2020 budget.
Once they decide whether to preserve rates or revenue and which new spending projects to approve, they’ll decide how much of whatever is left to give to employees as raises.
It’s the same dilemma commissioners faced last year, when they split the difference and adopted a slightly lower mill rate that still resulted in an increase in property tax revenue.
It is, in fact, a dilemma that’s become commonplace over the past 22 years.
During that time, according to Kansas Policy Institute data, Marion County property tax revenue has increased 247.9% — more than 3 times the 83.3% increase in the county’s mill rate and nearly 6½ times the increase in the cost of living.
All this came amid a population decline of 12.9% over the same period.
Marion County’s growth in mill rates greatly outpaced those of neighboring counties and its growth in spending outpaced that of all but one those counties.
During the same period Chase County property tax revenue increased 99% while its tax rate increased 4.7%.
In Morris County, tax revenue increased 206.4% while tax rates increased 57.5%.
In Dickinson, revenue was up 266.9% while rates were up 67.8%. In McPherson, comparable numbers were 147.9% and 12.2%. In Harvey, they were 159.7% and 38.1%. In Butler, they were 212.1% and 17.2%.
Commissioners’ first look at the budget dilemma came Monday, when hired guru Scot Loyd, a McPherson accountant, provided preliminary data amid a daylong session of budget requests from department heads.
According to Loyd, who speaks more in mill rates than in actual dollars raised, a repeat of this year’s tax rate would generate the equivalent of 2 mills more revenue.
The county can’t take full advantage of that, however, unless it reclassifies some spending as being set aside for emergencies or mandated by other levels of government, he said.
Without reclassifications similar to those made in the current budget, the state’s tax lid would limit property tax spending to the equivalent of a 1.6 mill increase — which, when converted into an actual tax rate, would actually be a decrease of about 0.4 of a mill, Loyd said.
The source of this confusing “windfall,” as commission chairman Kent Becker called it, is an unexplained substantial increase in the county’s assessed property valuation.
Because property now is assessed as being worth more, each mill levied generates more revenue without having to increase the mill rate.
State law generally limits increases in county property tax spending, capping them at the rate of inflation. But reclassifying some spending — a technique Loyd has nurtured — provides a loophole around the cap.
For the most part, department heads parading before commissioners Monday offered only minor shifts from current spending patterns.
The usual suspects — a couple of new sheriff’s cars, a couple of new trucks for roads and bridges managers, two new speed-control radar units, and a bunch of new computers and other office equipment — were requested, mainly in line with normal patterns of routine phased replacement of aging equipment.
Computers will need to be replaced, commissioners were told, because Windows 7 and earlier operating systems, still used by 53.2% of all Windows users according to Wikimedia online monitoring, will be obsolete.
Perhaps the most significant change proposed was the addition of a fifth full-time member of each shift of county ambulance attendants.
Emergency medical services director Travis Parmley proposed the new shift supervisor or lieutenant position as a way to ensure greater paramedic staffing for ambulances in Florence, Peabody, and Tampa.
He noted that it would require construction at the Marion ambulance station to accommodate an additional attendant.
The heated fishing dock at Marion County Park and Lake might be renovated or replaced, commissioners were told.
Other than that, the big unknown is how much gravel will be needed for roads and bridges crews.
New engineer Brice Goebel said much of the need would be determined by weather.
Loyd pointed out that gravel costs, already running ahead of last year, could easily consume double the 2 mill “windfall” generated by assessment changes.
Becker warned that the assessment boost might be temporary and could be reversed by declining values for agricultural land and vacant businesses, which are valued largely on the basis of their income-generating potential.
He and Loyd urged keeping at least six months’ worth of revenue in reserve to handle unexpected expenses or future valuation changes.
Nearly all department heads made at least some mention of county pay scales. County employees long have awaited an official response to an $18,000 pay study commissioned more than a year ago.
Commissioners said their response would be coming after all other spending requests were tallied and decisions about the desired mill rate and total levy were made.
Discussion of these points continued in great detail as what initially was a standing-room-only crowd dwindled to just two reporters, the other of whom left halfway through the day. Even camera operators recording the proceedings vanished for several hours.
What they missed were several attempts by department heads to encourage commissioners to grant immediate raises to employees the supervisors considered grossly underpaid.
Commissioners almost went along with a request from lake superintendent Issac Hett, who said he had money in his budget for this year to pay for a raise.
But county clerk Tina Spencer interjected:
“What you really need to do as a commission is to figure out what you’re doing with the pay plan because every department is going to be coming in here.”
She cautioned against leaving it to departments to set pay within a range.
Dallke agreed, saying: “We can’t turn it loose to all the department heads. You know what happens there.”
“They keep coming,” Spencer said, “and then the board says, ‘Do you have that in your budget?’ and they say, ‘Oh, sure we do; of course we do.’ ‘Well, then, go ahead.’
“If you do that, then you’re basically turning it over to the department heads, and they’re going to put their wages wherever, regardless of what the position is.”
Minor corrections to some of the numbers in this report were made after the print edition of the paper went to press.
Last modified June 20, 2019