Some Kansas homeowners could see their property taxes go up next year, to make up for an expected reduction in tax revenue from oil.
About 23 percent of the county’s tax revenue comes from oil and gas.
Mark Dean, the dean of Business Administration at Barton Community College, explained the situation last week during his financial report to the BCC board of trustees. In January or shortly thereafter, the Kansas Department of Revenue’s Property Valuation Division sets the value for a barrel of oil, for taxing purposes, for the year. On Feb. 2, 2013, General Kansas crude oil was set at $84 and eastern Kansas crude oil was set at $79. These values did not change in 2014.
Currently, however, Kansas crude is selling for about $50 a barrel. A new valuation might be even less than that.
“The price of oil, and the amount set, eventually ends up being part of the entire county valuation,” Dean said. “The valuation is made up of residential, oil, gas, utilities, personal property, minerals, etc. So, the higher the price of oil, the higher the valuation, typically.”
Setting the value around $50 would affect the college by about $900,000, Dean said. “It will have a huge impact on all taxing entities.” Dean made a prediction that county-wide, property taxes might increase by 10 to 12 mills.
“Mill levy is just a calculation based on the valuation and the dollars requested,” Dean explained. “So, when we request a certain dollar amount in our published budget, the mill levy is then calculated based on the valuation.”
Low oil prices also lead to lower production, and to lower revenue from wells. The college has an oil well at its Camp Aldrich facility.
Questions about the $1.9 million
At the same meeting, Dean talked about expected cuts in state aid, and he explained a recent payment from the county.
The college is anticipating a 7 percent cut in state aid in 2015 and in 2016, which would amount to $550,000 each year, he said.
His report took the trustees through revenue and expenses as of Nov. 30, but he told them the college had received $300,000 from the county this month that will be on the next statement.
This was part of $1.9 million that the Barton County Treasurer’s Office was several months late in distributing to various entities. The actual amount paid to the college recently was $396,930.12, as reported by the Great Bend Tribune after filing a Freedom of Information Act request for the figures.
Dean explained that getting the money in December instead of June was not a concern for the college.
The county collects tax money throughout the year, and the college receives payments from January through October, which spans two fiscal years for BCC. Typically, the college receives its largest payments from the county in January and in June. Because the county can never collect 100 percent of the taxes owed, the college creates a budget knowing only 90-95 percent of the amount is requests may be collected. Last year 93.3 percent of the money was collected.
“We never know how much is going to be coming in,” he said. The money wasn’t missing, and the payment wasn’t a windfall, Dean explained.
“It really didn’t affect us at all,” he said. “We were eventually going to get it.”