With new budget hurdles looming, the Great Bend Recreation Commission board Monday afternoon approved a statement of the commission’s intent to exceed the new “revenue-neutral rate” (RNR) as it began the budget planning process for the coming year.

The new challenges come as a result of Kansas Senate Bill 13, the “Truth in Taxation” bill, passed by the Legislature earlier this year, which places new taxing and notification requirements on all taxing entities in the state. 

At Monday’s meeting, GBRC Executive Director Diann Henderson walked the board through the ins and outs of the new law and its impact on the GBRC’s budget planning and timeline.

Henderson said the RNR required by the new law presents several challenges for the commission in planning its new budget. The RNR, as defined by the new law, is the mill levy at which an entity collects the same dollar amount of property taxes as the previous budget year. Any intent to exceed that rate requires additional public hearings and taxpayer notifications.

The RNR set for each entity comes from the county clerk, who provides estimated property valuations for the coming budget year to each entity in the county, based on the current year’s assessed property valuations. Henderson expected to receive this information sometime Tuesday.

The reason this presents a new challenge for the Rec Commission, as well as other entities, Henderson said, is because the commission’s budget is planned via a mill levy, which brings in tax revenue based on property valuations with an entity’s taxing district. A mill is equal to $1 for every $1,000 of assessed property value.

For the past several years, Henderson said, the commission has sought to hold its mill levy steady in the budget. The commission’s current mill levy sits at 8.5 mills, or $8.50 for every $1,000 in assessed property valuation. The commission’s goal, she said, is to continue to hold that rate steady for the coming year’s budget. However, current estimates Henderson provided the board based on estimates from the county, would put the RNR at 8.345 mills, meaning if the Rec Commission opted to keep the mill levy steady, the amount of taxes levied would go up around $36,000, based on those estimates.

Holding the mill levy steady could result in the commission levying more taxes than the previous year, should property valuations go up. This would put the commission in conflict with SB13 provisions. One of the reasons this presents such a challenge, Henderson said, is because many entities, including the Rec Commission, plan and certify their budgets throughout July and August. Although they have valuation estimates, valuations are not finalized until November. So, should the valuation rise from estimates used in the budget planning process, it would cause the entity to exceed the RNR, resulting in a violation, unless the entity notifies the public in advance through mail and additional public hearings, of its intent to exceed the RNR.

For these reasons, Henderson recommended the board approve a statement of the commission’s intent to exceed the RNR, which would allow the commission to keep the mill levy consistent, while allowing for leeway should final property valuations rise from current estimates when they are released in the fall.

With those changes coming, Henderson provided the board a tentative revised budget planning and certification timeline, which provides for the following:

• The board will hold a budget work session following its July 12 regular meeting, at which time it will approve budget and rate publications for public hearing, and set dates to publish notices of intent to exceed the RNR.

• Following this, the board has until July 20 to notify the county clerk of intent to exceed the RNR and provide the clerk with a proposed tax rate. Afterward, the board will publish budget and RNR public hearing notices.

• Tentatively, the board intends to hold these hearings on Monday, Aug. 23. The board may decide, Henderson said, to move its regular meeting to that date to coincide with those hearings. If it does so, the regular meeting will follow these budget hearings.

• Following this timeline, the goal is to provide the certified adopted budget to the Barton County Clerk and USD 428.