Property taxes on the rise

Already faced with higher water and electric bills, Iolans will be asked to pay more in property taxes to support the city’s 2016 budget.
City Council members voted, 5-2, Monday to schedule an Aug. 10 hearing to spell out Iola’s spending plan for the upcoming fiscal year. If approved, the budget will incorporate an ad valorem tax levy increase of more than 2 mills.
Spending for next year will be nearly static. Iola’s general fund levy for 2016 was pegged at $6,642,690, about $12,000 more than 2015.
That came after City Administrator Carl Slaugh pared several line items to close a nearly $600,000 gap between projected revenues and budget requests by various department heads.
Among the cuts Slaugh identified were removing the third year of a citywide salary adjustment plan approved in 2014, and paring the city’s street repair fund.
Even after that work, however, a gap of about $60,000 remained.
Slaugh recommended the Council enact a 2-mill increase in the city’s ad valorem tax levy, rather than make up the difference in increased utility fund transfers.
Slaugh kicked off the 80-minute discussion by noting the Council had already approved a water rate increase and higher electric meter charges earlier this month because those utility reserve funds have dipped precariously low.
To illustrate his point, City Clerk Roxanne Hutton noted the electric fund had about $650,000 in its account as of Monday morning.
That sounds significant, Slaugh said, until you consider the city spends about $1 million a month for its electric services.
“We quite easily take money from those (utility) funds,” Slaugh said. “But when it comes to raising the mill levy, that is hard to do.”
A property tax increase will lessen the pressure on the utility reserves, Slaugh explained.
Councilman Jon Wells, who voted for the tax hike, said perspective should be used. A 2-mill increase — which means the owner of a $100,000 home would spend about $20 additional in property taxes — accounts for less than 1 percent of the general fund.
Wells said that while he didn’t like raising taxes, the city’s highest priority should be building its utility reserves.
A 2-mill hike may be considered “a small amount,” Councilwoman Nancy Ford interjected, but for a worker whose income is stagnant, that increase still hurts.
Nevertheless, Ford also voted for the increase.. “We have to do it,” she said.
Councilwoman Beverly Franklin agreed.
“I don’t like it,” she said, “But we need to work to get our electric fund up.”

COUNCILMEN Aaron Franklin and Austin Sigg disagreed.
Sigg, who also voted against the utility rate increases July 13, said part of the city’s rationale behind implementing higher water and electric bills was to replenish those funds so they can continue to supplement the city’s general fund without property tax increases.
“Now, we’re talking about raising both anyway,” he said.
Aaron Franklin, meanwhile, asked about other options, such as implementing a spending freeze on equipment purchases.
“It doesn’t matter if (our utilities) are relatively cheap,” he said. “If we keep taxing them, and taxing them, it’s not a positive image.”
Aaron Franklin and Sigg both voted against publishing the budget with the proposed tax hike. Voting in favor were Beverly Franklin, Ford, Wells, Don Becker and Nancy Zornes.
Councilman Bob Shaughnessy was absent from Monday’s meeting.

THE BUDGET includes a levy of about 35.4 mills for general fund operations, 6.4 mills for the library and 1 mill for Iola’s industrial fund, or a combined 42.912 mills.
That means the owner of a $75,000 home will spend a shade more than $370 in property taxes, or about $18 more than was spent this year. That figure does not include property taxes for Allen County, Allen Community College or USD 257, each of which is setting up its own spending plans this month.
Budgets are due to the county clerk’s office by mid-August.