Barton County will live on the edge when it comes to its proposed 2024 budget. Eying a spending package and mill levy that are lower than in 2023, county officials are forgoing the so-called revenue neutral hearing, county officials said. 

“We are committed enough to remaining revenue neutral that we are willing to take this stand,” said County Commission Chairman Shawn Hutchinson. But, he said there are risks to this move.

What that means requires some explanation.

According to the county’s published budget summary, proposed budget includes a spending authority of $24,350,625, $11,998,892 of which comes from property taxes and $10,000 from fund transfers.

To support this, the county is proposing 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.

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, Hutchinson said. “There are dangers to this.”

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.

“But, we have enough in reserves to cover it,” he said. “So, why wouldn’t we do this?”

The county budget accounts for a quarter of all property taxes collected in Barton County.