After A public hearing and a resolution, the Barton County Commission Tuesday morning capped a challenging year by approving the county’s 2024 operating budget, including a spending package and mill levy that are lower than in 2023. In addition, confident county officials are forgoing the so-called revenue-neutral hearing. 

According to Country Administrator Matt Patzner, the budget includes a spending authority of $24,350,625, $11,998,892 of which comes from property taxes and $10,000 from fund transfers. This total is a decrease of $173,491.20 compared to 2023.

To pay for this, the county is tapping a mill rate of 37.146. A mill equals one dollar in taxation for every $1,000 in valuation. 

The county’s valuation jumped to $323,024,644, up from $292,490,734 last year when the $24,524,116 budget called for 41.108 mills. The valuation is based on the assessed taxable value of all property in the county.

“This budget is the organizational blueprint to maintain delivery quality serve public services at an affordable cost to the taxpayer,” Patzner said during the hearing. “The main goals that lead the commission of this proposed budget were to remain revenue neutral, which means loving the same or less total tax dollars as were levied for the 2023 budget, maintain quality public services in a way that is sustainable for us to come, invest in our employees who deliver these quality services and contribute to an expanding tax base at Barton County and enrich the quality of life.”

Every budget year is unique and presents its own challenges, he said. “This year was no different as the commission had to find a way to accomplish all those with continuing rising costs for commodity services and quality personnel as well as overseeing the largest courthouse improvement project accounting has taken on recent memory and all the challenges that come along with that.”

Other budget highlights include:

• The budget includes a $1 per hour increase for all county employees. This comes after spending the past two years bringing all full-time and part-time county employees to a minimum of $15 per hour.

• A total of 64% of the spending is either public safety, public works or public health, with 33% going to general government services and 3% to community development and outside agencies support.

“This was made possible with careful planning and the foresight to begin 2023 with a sufficient level of cash carry forward to deal with project costs, inflation and ever-increasing commodity prices, while still making a healthy transfer into reserves future,” he said. “As future budgets present themselves, they will bring with them unique challenges. I believe that with adequate cash reserves, zero debt and careful planning, the county can address these challenges in a sustainable way as they come forward.”

What about RNR?

If  an entity holds its mill levy flat, but the valuation goes up, taxpayers still pay more because each mill is worth more. 

So, in order for the county to be in compliance with the state’s Truth in Taxation (revenue neutral) statute, it had to hold the line on spending and lower its mill levy to account for this change. The “revenue neutral rate (RNR)” is the property tax rate in mills that would generate the same property tax revenue in dollars as levied during the previous tax year using the current tax year’s total assessed valuation.

If a taxing entity plans to exceed the RNR, it must notify all of this tax payers by mail and hold a public RNR hearing to explain it. Most often, these come before the regular public budget hearing.

Most local governing bodies are planning to hold an RNR hearing, even though they are planning on staying revenue neutral. This is because they are basing their budgets on preliminary valuation numbers which could go up or down before they are finalized in October, and that would impact their spending plans.

In Barton County’s case, the revenue neutral rate would have been 37.174. So, the proposed 2024 rate of 37.146 is below that as well as below the previous year’s rate.

So, by not conducting an RNR hearing, commissioners are taking a chance that any revisions in the valuation won’t  have a negative effect on the county.

Should the valuation drop, the county would have to swallow a drop in tax revenue because they would be stuck with the lower mill rate, he said. This decrease won’t likely amount to a lot, but it is an unknown.

“Furthermore, when comparing the proposed 2024 budget to the 2021 budget, there is a 9.144 mill levy reduction in that time span,” Patzner said.

A shared tax burden

Property taxes make up just over half of the total taxes levied by the county, Patzner said. Although the County Treasurer’s Office collects all the property taxes, the county budget accounts for a quarter of all property taxes generated.

The balance of the taxes are distributed to all the other taxing entities, like cities, school districts and townships.

“As with all budgets, the goal is to maintain quality public services,” Patzner said. “We’ll try to keep the ad valorem tax as small as possible to be good stewards of the taxpayers money.”

However, he noted, the budget excludes the so-called Local Ad Valorem (property) Tax Reduction Funds. This is an agreement between the state, cities and county governments in which the state has agreed to share percentages of certain excise and sales taxes with local governments for the purpose of reducing property tax collections.

But, the distribution of these funds was not included in the state’s 2024 budget. This means Barton County lost out of just over $1 million, which equates to about three mills, Patzner said.

“It could have a big impact,” he said. This is a statutory agreement made by the state, but it continues not to fund it.

A challenge to taxpayers

“I get a lot of criticism for saying this line, but I feel the mill levy is almost an arbitrary number,” commission Chairman Shawn Hutchinson, District 3, said. “I think that the public should not necessarily focus directly on the mill levy.”

Instead of looking at a sustainable mill levy for years to come, he thinks more attention should be paid to sustainable revenue. “The mill levy fluctuates by valuation and we can’t control that, all we can control is how much we budget, how much we spend.”

“One thing that this commission has taught me is (the importance of) growth, and Barton County is investing growth,” said District 2 Commissioner Barb Esfeld. “We’re going to be fine for years because of the growth we’re investing in, so I think we’re going to be just fine.”

But, things may not be the same with every taxing entity, Hutchinson said. “So, my challenge for Barton county citizens is if your property taxes go up, try and figure out why.”

The County Clerk’s Office is sending out the revenue-neutral notices to all taxpayers, County Appraiser Wendy Prosser said. These include each entity and what they are planning budget wise and public hearing wise.

This gives residents the information to attend the hearings and learn the justifications for proposed budgets, Prosser said.

Hutchinson said they are developing a formula to calculate actual county growth so that officials can look at that as they look at budgeting. This way, should the county need to increase revenue (hike taxes), it would be easier to explain this to the public.