County voices opposition to mortgage tax repeal

Douglas County commissioners added their voices on Wednesday night to what will likely be a chorus of voices from other county courthouses, urging the Kansas Legislature to leave in place an obscure tax known as the mortgage registration fee.

That’s a fee that home buyers and other real estate borrowers pay to cover the cost of the county’s Register of Deeds office, the agency that keeps official records of land titles, mortgages and liens on real estate in the county.

The fee – $2.60 for each $1,000 borrowed, which amounts to $390 for a $150,000 mortgage – is typically included as part of the closing costs when someone takes out a mortgage to buy a home or other piece of property.

“It’s considered property tax relief to citizens in every county,” Commissioner Mike Gaughan said. “It prevents us from having to raise the mill levy on everybody else.”

Officials say the fee generated about $1.8 million for Douglas County last year, and about $47 million for all counties. Replacing that with countywide property taxes would require raising the county’s mill levy by nearly 2 mills, or $34.50 of tax on a $150,000 home.

“It’d be like everybody in the county paying for everybody else’s mortgage,” said Kay Pesnell, Douglas County’s Register of Deeds.

The Kansas Bankers Association and the Kansas Realtors Association are lobbying state lawmakers to repeal the fee. They argue it’s unfair because it doesn’t tax people who pay cash to buy property, and it doesn’t apply to mortgages from certain government-sponsored lenders.

Pesnell said a legislative committee hearing on the bill could come as early as next week.

In other business, commissioners:

• Authorized renewing a dust palliative program for property owners who live along gravel roads, under rates and terms the same as last year.

• Approved a contract with the Austin Peters Group to conduct a wage and classification study on county positions for a cost not to exceed $51,630.

• Agreed to participate with the city of Lawrence in applying for a grant to fund construction of a multi-use path from Hobbs Park to Constant Park.

• Rescinded a previous resolution designating portions of North 1175 Road and East 1600 Road as “minimum maintenance” roads, and redesignated them for regular maintenance to accommodate construction of a new wastewater treatment facility for the city of Lawrence.

• And nominated Kyra Martinez for a seat on a joint city-county advisory group that will recommend changes and updates to the comprehensive development plan known as Horizon 2020.