Holton commission hears good city audit report

Holton’s municipal government remains in a financially sound position, controlling spending and keeping property taxes down to the point where the city’s budget for next year will likely put the mill levy at the state-mandated “revenue neutral rate,” the Holton City Commission learned on July 15.

Commissioners held their annual meeting with Olathe-based auditor Mike Peroo, who contracts with the city to craft its annual budget. Peroo told commissioners on Monday that the city’s budget for 2025 would have to match a revenue neutral rate of 50.169 mills without the commission having to hold a public hearing on exceeding that mill levy.

That proposed rate, commissioners decided, will be part of the city’s 2025 budget, and a public hearing on the budget will be held prior to the commission’s Monday, Aug. 19 regular meeting without a separate public hearing needed to allow for exceeding that rate. The 2025 budget will be drafted for publication in the Wednesday, Aug. 7 Holton Recorder, it was reported.

According to state law, the revenue neutral rate is set when a taxing entity budgets the exact same amount of property tax revenue in dollars for the upcoming budget year as it did for the current year. That rate, it was reported, does not allow for any changes related to inflation, debt service, capital improvements or other factors.

The city’s proposed revenue neutral rate of 50.169 mills for 2025, as determined by the Jackson County Clerk’s office based on the amount of property tax revenue to be generated in 2024, was based on the average value of a home in Holton increasing 8.5 percent over the 2024 appraisal, reducing the budgeted property tax levy from 2024’s 54.252 mills, Peroo said.

That projection for the revenue neutral rate was based on the average value of a residence in Holton, which Peroo said “has just skyrocketed” in recent years, rising from $95,462 in 2023 to $113,378 in 2024 to a proposed $123,021 in the county’s assessed valuation for 2025.

If the mill levy for 2025 were to be set at 54.252 mills as it was in 2024, he said, property taxes in Holton would increase, on average, $58 annually or $5 per month, based on the average value of a home.

With the proposed revenue neutral rate of 50.169 mills, that property tax increase would amount to about $2 for the year.

With the revenue neutral rate in place, the amount of tax revenue that the city will generate per mill will also rise from $28,354 in 2024 to $30,662 in 2025, an increase of 8.14 percent, according to Peroo, who calcuated that the levy would generate a total of $1,538,285 in taxes for the city in 2025, same as this year. That will give the city a budget authority of $14,067,344, up four percent from 2024, he said.

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