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.