If local governments have already made some tough budget decisions, the outlook for property tax revenues makes next year look even more dismal.
Douglas County Administrator Craig Weinaug is predicting a decline of 3 percent to 4 percent in Douglas County’s assessed property valuation. That would be the largest decline in the county’s tax base in at least 20 years.
It also means a loss of $3 million or $4 million in revenue for the county’s budget alone, according to Weinaug. For the city, which relies more heavily on sales tax revenue, the property tax decline would mean a loss of about $1 million in revenue next year.
Those losses are a serious threat to services in the county, city and, to some extent, the school district, which collects some local property taxes through its local option budget authority.
As Weinaug said this week, local leaders have to make tough decisions about services and spending. How much are they willing to cut services or how high are they willing to raise the mill levy? Weinaug is asking county commissioners not to wait for the spring budgeting season to start considering their options.
In other words, local governments have to live within their declining means, and that will require some changes.
For example, city commissioners have continued to fund modest merit pay increases for city workers. Over the past three years, many who live and work in Lawrence have lost jobs, seen wages become stagnant or had their pay cut. City employees’ pay shouldn’t be immune.
Funding for the Lawrence Public Library expansion approved by voters last November will come from property taxes, so a drop in the mill levy could make it more likely that library leaders would ask for a higher mill levy to fund the project. Voters approved $18 million in bonds — or 2 mills — for renovations and a parking lot. Next year, a 2-mill increase may not raise as much money in the city, but city leaders must insist library leaders stay within the guideline voters approved.
There are likely countless other issues that need the same scrutiny. It’s also unknown how long this property tax revenue drought will last. Living year-to-year or day-to-day won’t address the long-term revenue concerns local governments continue to face.
Local governments need to heed Weinaug’s call, and think creatively and wisely about the future. There can be no more sacred cows. Local taxpayers are getting weary.
Comments
true_patriot 1 year, 7 months ago
Given this dire prediction and that we have families from Lawrence and Eudora lining up for food pantries that have never had to resort to that before and that the recent free dental clinic drew long lines of families unable to afford health and dental care, can we finally declare a moratorium on developer and investment group welfare in Lawrence?
There are a spate of recent awards of and current requests for exactly that kind of welfare for a variety of projects around town. The pattern is typically an investor or an investment group with deep enough pockets to buy the building or land they want regardless of the effect on the community, then turn it into an investment project that they'd like to use taxpayer dollars for to boost or even just guarantee Return on Investment so they don't have to take a risk in the marketplace but can still reap the profits of the investment. They like to privatize the profits but push the risk onto the public, even when families are starving and going without basic health care.
Examples are the building at 9th and Mass and the related goal to appropriate publically-funded parking to pad their investment, the proposed building north of Lawrence Arts Center on the last little bit of green space that could be used for the highly successfully community movie nights in the summers and as a park the rest of the time, negotiating for the release of the Masonic Temple that's been held hostage since it was purchased by outbidding local interests that wanted to put it to immediate use when the Masons moved out, and so forth.
I believe in controlled, planned growth and thing that the city and county need to work with local developers and architects to create smart projects with long term benefits to our citizens and local businesses, but now is not the time to be hemorrhaging tax payer dollars to the wealthy's investment projects when times are so difficult for so many normal folks.
I hope those in positions of leadership will quit catering to these special interests and do what is morally and fiscally right for the times we live in.
Dave Trabert 1 year, 7 months ago
Targeted tax incentives, giveaways, TIFS and other forms of corporate welfare only pass the ever-rising cost of government on to other taxpayers. Businesses will certainly accept the handouts but studies have shown that employers much prefer low, predictable taxes over incentives. If a business isn't viable without these 'incentives' it's just a matter of time before it goes under.
Property taxes in Douglas County (county, cities, school districts, etc.) rose 128.5% between 1997 and 2010, while population and inflation increased 21.7% and 32.7%, respectively. Details on Douglas and all other counties are at http://www.kansasopengov.org/PropertyTax/tabid/1264/Default.aspx
The best incentive local government can give is to get spending under control and reduce the mill levy. That helps every employer and every taxpayer.
true_patriot 1 year, 7 months ago
Well said. Thanks for the information and the links.
chootspa 1 year, 7 months ago
Good afternoon. I'd like to introduce you to Wichita resident, Dave Trabert. He's in charge of the Koch-funded Kansas Policy Institute, a libertarian group with a clear bias that coincidentally matches up with the views of the Kochs and ALEC. He sure does like posting links to his site, as proven by his post. Unless things have changed, he's also part of the Koch-funded ALEC, so he's a real one-stop-shop of corporate political influence. KPI uses government info, as he's quick to point out, but he's fantastic at framing it with bias to support his message. At KPI, the cart always comes before the horse, because we have data that says states with more carts have more horses.
I actually agree that TIFS are a bad idea, but I like to know my paid sources when it comes to people systematically spamming state newspapers with LTEs and comments, especially when they've got a clear financial motive in doing so.
heygary 1 year, 7 months ago
Problem with being a leader is you have to take action before the problem becomes so clearly focused that it is obvious to everyone!
Our community leaders defer making the tough decision by putting the library initiative "on the ballot" so a bunch of non-property tax paying residents could vote to spend other peoples money!
They wittness the housing bubble bursting all around the country and deny housing values have declined here in Lawrence. Vote them all out this next time ... we need leadership that understands financial responsibility.
Moderate 1 year, 7 months ago
It is a fine mess we are in. Somewhere around 10% of us have been hit hardest (less here in Lawrence). The rest to varying degrees. It should be obvious but the very people who will have to absorb the mil levy increase are the ones who have lost value in their properties. Unlike the 4% or so acknowledged by the appraisers, I gather from the realtors that we are likely closer to 10% or more. That was the retirement nest egg of those property owners. It is lost. We must now reduce our living standards to try to recover. We have a vast social safety net that is mostly untouched by the cuts so far. Must it grow at the expense of those already hard hit?
I know the answer. I expect the city and county to levy a mil increase of 5 to 10% to help the “poor” while the retirement nest egg of the contributors declines by 10 to 15%. Why is it always the productive portion of the society that is expected to bear the entire burden? Should that burden not be shared?
Perhaps our city and county could absorb a 10% decline in the number of employees. Perhaps the two can bring remuneration increases in line with those experienced by “Bob” the plumber’s helper. Perhaps golden dreams of heritage and environmental set asides can wait until the economy improves. Perhaps this is not the time to make financial contributions to “startup” companies who will employ the well off. Perhaps we do not need to generate fake property tax revenue by taxing a municipal service. Perhaps we could bring our local safety net in line with the rest of Kansas to ease the burden on the local property taxpayers. Ah, but this is Lawrence – business as usual. The sheep still have a little wool left on them.
beaujackson 1 year, 7 months ago
Enough, already!
Cancel the foolish library and 3-story parking garage project!
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