Tonganoxie wants to stay competitive when it comes to attracting new homeowners into the city, but city leaders area awaiting word from the Kansas attorney general’s office before it offers any tax incentives.
During a work session Monday night, city leaders continued their discussion on a plan that would rebate a percentage of its portion of property taxes on new home construction.
The Tonganoxie City Council is awaiting an opinion from Kansas Attorney General Steve Six on how much of the city it can cover as a revitalization district so it would not be seen as the city favoring one subdivision or one developer over another.
Another possible roadblock to the program is its cost. Mike Yanez, city administrator, said the city has incurred debt to maintain its infrastructure. He said the city’s debt service was structured around expected growth of at least 5 percent each year in assessed valuation.
Last year the city’s valuation assessment increased by less than 2 percent, and with only 10 building permits issued so far this year, Yanez doesn’t expect it to get any better.
“If there were no valuation increases we could be looking at a tax increase of 4 mills,” Yanez said.
The idea for a tax rebate program comes on the heels of a rebate program recently approved for Basehor. City leaders had previously discussed the issue stating they wanted to be competitive with other cities in the county.