The Kansas Statehouse in Topeka.

Topeka ? Douglas County and city of Lawrence officials have started the early steps of putting together budget proposals for 2018, and they are bracing themselves for the likelihood that a new state law limiting their ability to increase property tax revenues will force them to cut spending in many areas.

“We have already started the budget preparation process,” Douglas County administrator Craig Weinaug said. “We’ve amended our process to enable us to prepare essentially two budgets: one that complies with the law; and one that says this is how much it would cost to preserve existing services without cuts.”

In 2015, Kansas lawmakers passed a law known as a “tax lid” that requires cities and counties to get voter approval before they could increase property tax revenues from one year to the next beyond the rate of inflation. That law was supposed to take effect July 1, 2018.

The following year, however, lawmakers amended the tax lid law, moving the effective date up by one year, so that it will apply to the budgets that local officials are currently preparing, but allowing some exceptions to the lid law, such as revenue needed to improve public safety.

Still, Weinaug said, even with the new exceptions, the county may be forced to cut spending in non-exempt portions of the budget, mainly because health insurance costs are expected to rise beyond the rate of inflation.

“Our health insurance costs are projected to go up 8 percent this year,” he said. “So that 8 percent … eats up almost all of the inflationary allowance that the lid law allows, which means everything that is a non-exempt function, in effect, has to be cut in real terms by 2 or 3 percent.”

Officials in the Lawrence city manager’s office said they are facing the same situation with rising health insurance costs, and that could force cuts in certain non-exempt portions of the city’s budget as well.

Local government officials are still pushing the Legislature for changes in the tax lid law.

One bill pending in the House would change the election requirement so local governments would not have to seek voter approval for higher budgets, but those budgets would be subject to protest petition.

Another bill pending in a Senate Committee would repeal the tax lid entirely.

Both bills have had hearings in their respective tax committees, but neither has been acted upon yet.

Rep. Steve Johnson, R-Assaria, who chairs the House tax committee, said it’s possible that neither bill will be acted upon this year, and he suggested local government officials throughout the state should assume the lid will stay in place.

“I’m not sure it goes anywhere this year,” Johnson said. “As a worst case scenario, if I were planning that budget, I would assume it’s still there.”

And that’s the assumption that Weinaug said Douglas County is working under, which would mean some parts of the county’s budget will have to be cut, unless local voters are willing to authorize greater spending.

For example, he said, “About the only cost we have in the Register of Deeds office is personnel cost, and the Register of Deeds function is not exempt from the lid. So if there is any pay increase at all, then the number of personnel has to be reduced.

“If you increase the pay of those employees — and yeah, you can freeze pay one year or two years, possibly without any negative consequences to the county — but if you recognize the need to treat your employees fairly, in the Register of Deeds office in the first year, we’re going to have to cut an employee, and eventually we’ll have to cut a second employee,” Weinaug said.

Other areas of the budget facing potential cuts, he said, would be the Public Works Department, which may not be able to repave as many miles of roadway or repair as many bridges as in the past, and the county’s contribution to the Lawrence-Douglas County Health Department.

In order to meet the deadlines for calling a special election, both the city and county will need to have draft budgets finalized by about July 1, a little more than three months away.

If, however they choose to stay within the boundaries set by the tax lid, they would have until about mid-July to publish a budget notice, which would lead to a public hearing and final adoption of the budget in mid-August.