After two public hearings and a resolution, the Barton County Commission Monday morning capped a challenging year by approving the county’s 2022 operating budget, a budget that balanced an increased valuation with rising operating costs.

“This budget represents an organizational blueprint to maintain delivery of quality public services at an affordable cost to the taxpayer while lowering the amount of levied dollars and mill levy,” County Administrator Phil Hathcock said in presenting the spending plan. 

The estimated mill levy of 44.361 is lower than the 2020 mill levy that funded the 2021 budget, he said. The total mill levy, 44.361, generates $12,002,246 in property tax and is equivalent to $270,562 per mill.

One mill is one dollar per $1,000 of assessed value.  

“In summary, the 2022 budget is funded by a lower mill levy, which is possible due to increased cash carry forward, increased valuations, and budget reductions,” he said.  

“The county presently has adequate cash reserves in the Capital Improvement and Equipment Replacement accounts,” he said. “The county remains fiscally sound and is in the position to sustain a constant mill levy while providing quality services.” 

Under the plan, the total spending authority for the county is $22,929,426. Of that, $12,002,246 comes from ad valorem, or property, taxes.

He said property taxes account for just over half of the county’s spending authority. Of that, half goes to public work (roads and bridges) and public safety (Sheriff’s Office and 911).

Roughly a quarter of the property taxes collected in Barton County go to the county. The balance goes to such entities as school districts, cities, Barton Community College and others.

Another challenging year

“The commissioners once again faced many challenges this year as they worked to compile the 2022 operating budget,” Hathcock said. Most notably was determining how to fund annual increasing costs related to personnel, general liability insurance, elections and emergency services. 

Fortunately, the 2022 budget includes a valuation increase of $6,622,410, which means each mill is worth more and equates to an increase of budget authority of $293,777. The valuation is the total value of all property in the county as determined by the County Appraiser’s Office.

In addition, the budget includes increasing costs that the county cannot control such as a $49,000 increase in health insurance costs and a $50,000 increase in general liability insurance costs, Hathcock said. Some other costs that were included in the budget were a $73,000 increase in 911/Communications costs, a tiered raise for county employees, an increase for the gubernatorial election, $213,500 increase in emergency medical services subsidy, and $250,000 for economic development.  

“The proposed budget supports a slightly lower mill levy for the 2022 year, many budget line items were reduced to fund the mentioned increases,” he said.

There were other requests to increase expenditures that were not funded. Supported agencies as well as all county departments were held at the 2021 level excepting the increases already mentioned.

A long process

First, commissions held a revenue-neutral rate hearing for the 2022 budget.

The requirement to hold a Revenue Neutral Rate public hearing was passed into law in 2021. The revenue-neutral rate is the tax rate that would generate the same total property tax in dollars for the county as the previous tax year using the current tax year’s total  assessed valuation, Hathcock said.

This was just a formality in case the county’s mill rate exceeded the revenue-neutral rate, he said. He did not anticipate that happening.

Next was the public hearing.

Elected officials, department heads and supported agencies were asked to submit budget requests for the 2022. The proposed budget was presented to receive public comment.

The public notice announcing this was published Aug. 11. That notice outlined the budget.

Then, they approved a resolution allowing Barton County to levy a property tax rate exceeding the revenue-neutral rate.

The budget is funded at a mill levy of 44.361, with the revenue-neutral rate calculated at 45.312 mills. But, it was recommended the commission adopt the resolution in the event that Barton County’s valuation falls below calculated estimates.

Finally, the approved the budget as it was presented.

This was the culmination of months of budget discussions held by commissioners, Hathcock, County Clerk Donna Zimmerman, Finance Officer Matt Patzner, other elected officials, department heads and supported agencies.

What is revenue-neutral?

In the waning days of the 2021 session, the Kansas Legislature passed Senate Bill 13. Dubbed by the Senate as the Truth in Taxation or the revenue-neutral bill, The aim was to make the state’s complex tax system more transparent.

In a nutshell, SB 13 prohibits all taxing entities (from counties to townships to school districts) from increasing their tax collections by more than they did the year previous. This means, if an entity’s valuation (the total value of all property) goes up, the mill rate would have to go down to collect the same amount of taxes.

In addition, it establishes a requirement of notices to taxpayers and public hearing for municipalities seeking to collect property taxes exceeding their revenue-neutral rate.

SB 13 send public officials scrambling as they tried to meet the challenging, rapidly approaching deadlines imposed by the legislation.

The county had its preliminary property tax totals in July. The deadline to notify the County Clerk’s Office with the intent to hold a hearing was July 20.

The problem lies with the valuation numbers. The finalized one won’t be available until October, and possible fluctuations could impact the county’s budget one way or the other.

Under the statute, should the county over charge taxpayers, it must refund the amount. And, should it be less than anticipated, the county loses out on that revenue.

So, just in case, the county opted to hold the revenue-neutral hearing.

Budgets have historically been due by Aug, 25. But, because of the extra effort involved due to SB 13, entities were given an extension until Oct. 1, although Barton County wound up not needing that.

In Barton County, 24 entities that levy taxes filed a notice to exceed their revenue-neutral rate and will file budgets under the extended deadline of Oct. 1, possibly pushing back the generation of tax levies, tax roll and tax statements.

This replaced the so-called property tax lid implemented by the Legislature in 2016. With this, cities and counties could not raise their mill rate, but didn’t restrict what the entities could garner off those mills.

“First, we had the tax lid which was really difficult,” District 5 Commissioner Jennifer Schartz said. “Now we have the revenue-neutral rate.”

She said Barton County can make it work since it was in  good fiscal shape. But, she was worried about counties that are struggling.

“It still ham-strings us,” she said. She just wishes the state would handle state problems and leave counties to deal with the issues they understand.