Douglas County Commission set to learn how challenging 2018 budget will be with new state tax lid; crisis center also to be discussed
Spending cuts, fee increases or a countywide election this summer to raise property taxes are among the possibilities that Douglas County commissioners will be briefed on as they begin studying what is expected to be a tough 2018 budget process.
County commissioners at a 4 p.m. study session on Wednesday will begin to learn how a tax lid approved by state legislators is expected to dramatically change how the county crafts its budget.
“It is going to be a huge challenge,” Assistant County Administrator Sarah Plinsky said. “The county is significantly reliant on property taxes.”
Plinsky said the tax lid — which was tweaked by the Kansas Legislature last year — has forced the county to accelerate its process for crafting the 2018 budget.
The tax lid ties property tax increases to the consumer price index, but does allow local governments to take advantage of added overall property valuation increases from new growth, Plinsky said. Any proposed mill levy increase that would exceed that consumer price index would required approval of county voters in a special mail-in ballot scheduled for July or August. That would be just two to three months after voters in the Lawrence public school district are asked to approve an $87 million bond issue for school improvements.
The tax lid exempts additional property tax authority needed for new bonded debt service and spending on law enforcement, fire protection, emergency medical and emergency communications, Plinsky said.
County staff members now are working to determine exactly how much increased spending authority the county would have for 2018 once new valuation growth is factored in and the allowable exempted spending is accounted for, Plinsky said.
“We’re going to walk through that formula,” she said. “We don’t have all the figures yet because we don’t have new valuation numbers, but that’s the first step.”
The staff also would share with commissioners the accelerated budget timeline, Plinsky said. Processes, such as the County Commission’s discussions with community partners, would be moved forward on the calendar because any decision to have a referendum on added property tax authority would have to be filed with the Douglas County Clerk’s Office by July 1.
The tax lid statute requires any tax lid referendum be done through a mail-in ballot in July or August, Plinsky said. Should commissioners decide to go that route, they would have to pass two budgets by the traditional mid-August deadline. One budget would reflect spending within the tax lid’s parameters and the other would include the additional spending voters would be asked to approve.
Wednesday’s discussion also will contemplate what would happen if commissioners decide not to rely on additional property taxes to craft the 2018 budget. Such a scenario could require increasing fees for services and cuts to services, Plinsky said. The possibility of cuts also contributes to the need to accelerate the budget process, Plinsky said. County departments and community agencies need to understand early on that the county is facing new budget pressures.
“In the past, we’ve always told the agencies that if they have needs or the state has cut you then let us know,” she said. “Well, this year we’ve also been capped.”
There have been a number of bills proposed in the current legislative session to amend the tax lid legislation, including those that would exempt spending on mental health or employee benefits from the tax lid. The chances of those bills being passed into law, though, aren’t clear.
Plinsky said, however, any move by the Legislature to provide tax lid relief for local mental health spending or employee benefits would make it much easier for the county to deal with the tax lid in the 2018 budget year.
“If they move out all employee benefits and mental health, I would say for the first year (the tax lid) would not be an issue,” she said. “KPERS alone is 6 percent increases every year. I’m not quite sure how you make that math work when you’re capped to a CPI of 1.4 percent and your KPERS alone is 6 percent.”
County officials argue the tax lid should tie employee benefits to the inflation rate of health insurance, which is considerably higher than the consumer price index, Plinsky said.
In other business, commissioners also will hold a discussion with community stakeholders about a proposed crisis intervention center.
Commissioner Nancy Thellman said the crisis intervention center discussion would involve Bert Nash Community Mental Health Center, Lawrence Memorial Hospital and Heartland Health Outreach. It will address the needs to provide wraparound services for mental illness essential to making the proposed crisis center effective.
“It’s an opportunity for this group of collaborative partners to layout where we think we are, where we might be going and a first look at more tangible ideas,” Thellman said.
The Douglas County Commission meets at 4 p.m. Wednesday at the Douglas County Courthouse, 1100 Massachusetts St. To view the complete agenda visit douglascountyks.org.