As budget discussions begin, city leaders express interest in keeping property tax rate flat, providing more utility assistance
photo by: Nick Krug
In their first discussion of the city’s 2022 budget, city leaders said they would like to keep the property tax rate flat and were interested in ways to mitigate the city’s rising utility rates.
As part of its study session Tuesday, the Lawrence City Commission discussed 2021 revenue projections and directed staff regarding key policy questions that will affect the 2022 budget. Commissioners agreed that they did not want to increase the city’s property tax rate as part of the budget.
“I definitely want to leave the mill levy flat,” Mayor Brad Finkeldei said. “I think that’s a starting point.”
Other commissioners agreed, though Commissioner Jennifer Ananda said while she was not advocating for an increase, she could not rule out a circumstance in which she would consider raising the property tax rate. She said that unlike sales tax, property tax is not a regressive tax, and there is more accountability for local leaders compared to federal leaders when it comes to how tax revenue is spent.
“I do think it’s never a never for me, and I think that’s responsible as part of this conversation, particularly around our strategic plan and what we want to do and the real impact that I think that we will have when we focus on those priorities,” Ananda said. “There’s going to be visible outcomes that benefit our community immeasurably in many ways.”
Though city staff discussed some revenue streams that have been negatively impacted by the coronavirus pandemic, such as the transient guest tax and the liquor tax, there are federal dollars that can be used to offset those losses as well as to support other programs. Danielle Buschkoetter, budget and strategic initiatives administrator, told the commission that the city received confirmation that it would receive $9.65 million in federal relief this year and next year, for a total of $19.3 million.
Commissioners also discussed ways to mitigate the impact of recent utility rate increases, which city staff anticipates will continue in coming years as part of a planned fee schedule and infrastructure plans. However, commissioners must approve any increases in utility rates annually as part of the city’s budget process. As utility rates have risen in recent years, some commissioners have suggested the city expand its limited utility assistance program, but that has yet to occur.
Commissioners indicated that some level of utility rate increase would likely be needed, but Commissioner Stuart Boley, Commissioner Lisa Larsen and Finkeldei said they would like to try to minimize rate increases so they were not as significant, as well as provide more utility assistance. However, Ananda said she would like to focus on increasing the availability of utility assistance, rather than reducing the rate increases that the city has already spent a significant amount of time discussing.
Currently, only residents who have very low incomes and are also over age 60 are eligible to receive reductions in their utility bills. The number of people excluded by those narrow qualifications was brought up in 2018, when an expansion of the program was initially suggested. As the Journal-World reported, only 86 of the city’s 32,000 utility customers were receiving a discount on their bills at that time. The city did set aside one-time federal funding to provide pandemic-related utility assistance, but residents had to provide documentation to show that their inability to pay was related to the pandemic, and the program was temporary.
Boley said he would like to see a more “meaningful” assistance program, and Larsen agreed. Larsen also acknowledged that expanding the program has been discussed for several years, and that she hoped the city had an opportunity to put a structured program in place because it was definitely needed.
City staff sought commissioners’ positions when it comes to the city’s property tax rate and fees ahead of the drafting of the city manager’s recommended budget for next year. Other topics of discussion included programs or projects commissioners want to ensure are included in the proposed budget; whether they want to consider a market-competitive staff compensation plan; how much investment they would like to see in each of the five areas of the strategic plan; and whether they support a prioritization plan for federal coronavirus relief and whether the city should seek grants for infrastructure. City Manager Craig Owens said those discussions would be ongoing throughout the budget process.