People buying new homes and refinancing mortgages are helping fill widening budget holes for Douglas County government.

The county already has collected a record $2.88 million in taxes on mortgage registrations so far this year, up 13.5 percent from all of last year.

The take is part of the $3.43 million expected to be collected this year by the Register of Deeds Office, nearly $1.8 million more than county officials had anticipated as part of their official budget for 2003.

“We thought the recession would take a bite into the mortgage tax,” said Craig Weinaug, county administrator. “We guessed wrong, but we guessed it. And as a result of being wrong, we’re in better shape rather than worse shape. It’s a good thing.”

The extra money will go a long way toward plugging budget gaps elsewhere in the budget — both existing and anticipated.

According to Weinaug’s calculations, the county will end this year with less money than expected on several fronts:

• State funds and tax relief, down $1.6 million.
• County sales tax, down $361,000.

Annual taxes collected by Douglas County on mortgage registrations and annual percentage change, since 1991:¢ 2003: $2.88 million (through Monday).¢ 2002: $2.54 million, up 19 percent.¢ 2001: $2.14 million, up 41 percent.¢ 2000: $1.51 million, down 6 percent.¢ 1999: $1.61 million, down 1 percent.¢ 1998: $1.62 million, up 37 percent.¢ 1997: $1.19 million, up 8 percent.¢ 1996: $1.1 million, up 28 percent.¢ 1995: $858,000, down 5 percent.¢ 1994: $899,000, down 13 percent.¢ 1993: $1.03 million, up 33 percent.¢ 1992: $775,000, up 78 percent.

• Property tax, down $265,500.

County commissioners already had adjusted to the loss of state funds by cutting $1.4 million in expenses earlier this year. The moves included the elimination of 11 jobs, reducing allocations to outside agencies and putting off several construction projects.

But this week’s news of the boost in taxes on mortgage registrations — the county charges 26 cents in tax for every $100 of a mortgage’s value — came as a pleasant surprise for commissioners, who also learned that the county had landed more than $200,000 in grants.

Taken together, the county came out ahead.

“We’re a little more than $1.1 million to the good,” Commissioner Charles Jones said. “That’s good.”

But the bonus money won’t all be spent by the end of this year.

Weinaug said much of the money would be tucked away into reserve funds to help brace against state cuts that could surface during the next few months. A judge already has declared the state’s method of financing public schools to be unconstitutional and has recommended pumping another $1 billion into the system.

Weinaug fears that legislators could cut, at least in part, into money normally reserved for roads and other county services. The county still gets about $1.3 million from the state to tend to transportation needs.

“If they’re committed to not increasing taxes, they again might take money away from cities and counties,” Weinaug said.

Such cuts once again could challenge the county’s budget, but Kay Pesnell said she’d be ready.

Pesnell, the county’s register of deeds, expects another robust year of mortgage activity.

“We’ve got all these builders in Lawrence who are doing all these nice subdivisions, and there are more coming up,” Pesnell said. “We look for 2004 to be another big year. We know we’ll be busy.”