Douglas County administrator Craig Weinaug sees the potential for huge changes ahead for 2013 in both the level of service provided by county government and the cost of those services to taxpayers.
The only problem, he says, is that the decisions lie largely in the hands of elected officials in Topeka and, to some extent, in Washington.
"What happens in the state legislature over the next three months will have a huge impact on local governments, regardless of what they decide" Weinaug said. "If they take no actions that impact us, we already face significant difficult decisions adjusting to a smaller assessed value. And the extent to which that job becomes excruciatingly difficult will be directly dependent upon actions of the state, and what actions they take to further the actions they took last year."
Specifically, Weinaug said he's concerned that the dramatic income tax cuts that Gov. Sam Brownback, a Republican, signed into law in 2012 will force the state to cut back on spending for social services, mental health care and a wide range of other programs that are operated at the local level. That's forcing local governments to either raise taxes to continue those services or make deep cuts to balance their own budgets.
In addition, Weinaug said he expects Kansas lawmakers to revisit an issue regarding what's covered by property taxes that failed in the 2012 session, but could be revived in 2013. If it passes this year, he said, it could take a big bite out of the property tax base of all local governments.
"There's a bill that failed last year that redefines machinery and equipment in a way that would take a huge amount of tax base away from our property tax base," he said. "Because of the elections in November, I anticipate that some form of that bill that failed in the last legislature will succeed. and that could impact Douglas County alone to the tune of about $2 million in tax revenue. And the impacts of the other taxing bodies in Douglas County would be probably three times that amount."
"If that comes about, all of the taxing bodies will face very significant cuts in expenditures and services, and/or tax increases to make up the difference," Weinaug said.
Weinaug was referring to Senate Bill 317, and a companion bill, House Bill 2501, that effectively would have defined many industrial buildings and facilities as "machinery and equipment." That would have made many such facilities completely exempt from taxation, while taxes on others would be phased out over time.
State budget officials estimated that would have cost at least $134 million a year just from the statewide 20-mill levy that funds public schools, but there was no immediate estimate of its potential impact on other local governments. Both bills were introduced late in the session and died in committees before they could be considered by the full chambers.
Beyond tax and spending issues, Weinaug said the state's decision on whether to participate in the federal health reform law known as the Affordable Care Act also will have a big impact at the county level.
That law originally required states to expand Medicaid programs to include many more low- and moderate-income people. Most of the cost of that expansion would be paid by the federal government. The U.S. Supreme Court, however, ruled last year that Congress could not mandate states to take part in that expansion. As a result, states now have the option of expanding Medicaid or not.
Gov. Brownback says he has not yet decided whether to recommend that Kansas take part in the expansion, though many other Republican governors have opted out.
"The actions of the governor in deciding whether to participate in the Affordable Care Act will also have huge impacts on us," Weinaug said. "If the state makes the decision not to participate, the agencies that provide health care for the residents of Douglas County will be caught in a Catch-22 situation, in that they're mandated to provide services without any of the revenue that goes with that. And that will have a huge impact on the residents of Douglas County."
In 2012, Douglas County spent about $6.1 million for "community agency support." That includes funding for senior services, the Lawrence-Douglas County Health Department, support for the Bert Nash Community Mental Health Center, and residential services for the disabled, just to name a few.