State legislature wants budget controls, just not for state government
The new “revenue-neutral rate’’ law that was passed by the State Legislature and signed by the governor recently was a big waste of time and will not save any money, but it probably provided some good “talking points’’ for the state legislators who voted for it when they returned home from Topeka.
Senate Bill 13 repealed the tax lid legislation that was previously in effect for cities, counties and schools and mostly ineffective because it had so many exemptions and merely required some creative bookkeeping to outmaneuver.
This year, local government entities, such as city councils, county commissions and school boards, are required to hold a special public hearing if their new proposed budgets will collect any additional property taxes beyond what they collected last year.
Minutes after that special public hearing is over, then the regular budget hearings will be held the same evenings for cities, counties and schools and the new budgets will be approved like they always are.
Neither of these public hearings likely will be well attended because, generally speaking, local elected officials do good jobs budgeting and most local citizens favor strong, well-equipped schools and effeciently-operating cities and counties.
On the contrary, however, if local citizens do not approve of the budgeting plans of cities, counties and schools, they already have ample opportunity to voice those concerns before new budgets get approved. In fact, Kansas is the model for how good government should work.
This “revenue neutral rate’’ is determined by taking the actual amount of taxes levied for last year’s budgets divided by this year’s assessed values. If a city, county or school district experienced an increase in assessed valuation this past year (and most of ours do every year) then the governing entity must actually lower its mill levy rate in order to be “revenue neutral’’ and not increase the amount of new taxes to be generated.
The problem with the “revenue-neutral rate’’ is that it does not take into account increased operating costs and inflation, so if cities, counties and schools aren’t keeping up with those costs, then the cities, county and schools are falling behind. If they want to approve a budget that would collect taxes above the RNR, the new law requires taxing entities to notify the county clerk by July 15 and schedule the special public hearing.
Beginning next year, county clerks will be required to mail notification of the special hearings to each taxpayer with property within the taxing district at least 10 days before the public hearing, which will require extra work and likely extra printing and payroll expense.
In 2022 and 2023 the state treasury will provide funds for printing and postage costs for the clerks’ offices to publicize the special public notices. After 2023, each taxing entity will have to cover those costs on their own. That’s what they call “an unfunded mandate.’’
The special public hearings to discuss an entity exceeding its RNR must be held by Sept. 10 each year and include an opportunity for taxpayers to make comments.
Our elected officials on city councils, county commissions and school boards need not feel shame if they must increase local taxes to pay for all of the services that residents expect, such as police, fire, electric, street, water and sewer services, and more. Elected officials must run the cities, counties and schools like good businesses and good businesses must cover their expenses.
It’s sadly ironic that this same “revenue-neutral rate’’ budgeting roadblock has not been put in place for the state government to follow.