There’s never a time George Paley isn’t putting aside money to pay taxes on his downtown Lawrence properties.

“As soon as I make one payment, I start saving up for the next,” he said Wednesday.

For Paley — and all other property owners across the state — that “next” payment will come a little sooner than expected in 2004.

Gov. Kathleen Sebelius on Wednesday signed a “tax accelerator” measure that will allow the state to collect second-half property taxes in May 2004 instead of the usual billing day 40 days later.

The measure will provide a one-time benefit of $179 million to the state general fund, helping the state to end its fiscal year in the black. But it will force property owners, agencies that oversee escrow accounts for tax payments, and school districts to juggle their finances.

“It’s just a headache so they can do their smoke-and-mirrors thing to balance the budget,” said Todd Sutherland, president of University National Bank of Lawrence. “But it’s going to come out of the consumers’ cash flow.”

Protecting services

In a typical year, Kansas property owners receive property tax bills in November. They have the option of splitting the bill into two payments — one due Dec. 20, the other June 20.

Next year, the second payment will be moved permanently to May 10.

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Sebelius took the action under a law approved this year by legislators. The law gave her the option speeding property tax collections or delaying some tax refunds.

She said Wednesday that speeding tax collections would allow the state to protect schools and other state services from cuts.

“Tax collections last year were $43 million lower than projected. Without the accelerator, our reserves would be too low,” she said. “My decision protects school budgets and social services from mid-year cuts.”

Property owners with mortgages pay into an escrow account that banks and mortgage brokers use to make property tax payments at the correct time. Sutherland said accelerating the payment would mean many escrow accounts would be short when the tax bill comes due in May.

That means mortgage lenders will charge their customers extra through the 12 months after the bill, he said, to make up shortfall.

“The main thing for the consumer is they’ll be out more money for the next 12 months,” Sutherland said. “You’re putting five pounds of sand in a four-pound bag.”

See-saw effect

The early tax payment means the Lawrence school district will get an extra state aid disbursement at the end of the 2003-04 school year. That will allow the school district to keep its local-option budget tax levy low during the year, because state aid will pick up most of the slack.

Officials say that during the 2004-2005 school year, however, the school levy could jump as much as four mills when local taxes are again needed to meet the budget.

A mill is $1 in taxes for every $1,000 in assessed property valuation.

“It’s really just a shift of funding,” said Kathy Johnson, the district’s budget director.

Douglas County Treasurer Pat Wells said she would try to get the word out to property owners and mortgage providers who have asked for special notification.

Many property owners might be expected to grumble about having to dig into their pockets earlier than expected. Paley, on the other hand, said he believed the measure was necessary to keep schools, universities and other state services in business.

“At this point, I understand them getting money 40 days early could help a lot,” he said. “I’m happy to pitch in.”