Dear editor:
As we work this summer to finalize the budget for 2024, the Allen County Commission continues to be mindful of the property tax burden being placed on our fellow citizens. To help ease that burden we strive to make good decisions for our community, including passing a spending plan that meets our collective needs and values. Each year, the Commission must weigh competing costs against perceived benefits as it adopts a budget that we believe is in Allen County’s best interest.
One tool that could be used to help stabilize local property taxes, but county commissions have not been able to use for twenty years due to the Legislature’s snubbing of a state law, is the Local Ad Valorem Tax Reduction fund or LAVTR.
Under the 1965 LAVTR fund law (KSA 79-2959), 3.63% of sales tax and compensating use tax as well as the local share of cigarette stamp taxes and cereal malt beverage taxes collected by the State of Kansas are to be returned to city and county governments. These funds are then directly applied to lowering property tax levies dollar-for-dollar.
This time-tested partnership began in 1937 but was effectively canceled in 2003 when the Legislature made no fund allocation — something that the Legislature has continued to do each year since. This inaction means that from 2004 through 2022, local governments have not received more than $1.7 billion in legally owed revenues that have been collected by the state. Allen County, just for this past year, lost out on over $522,000 in LAVTR money that was not returned to us. Every dollar of that would have gone to lower property taxes. In essence, taxpayers are paying these taxes twice, once at the store when they purchase their goods and then a second time when they pay their property taxes to the local government.
Additionally, in 2006, the Kansas Legislature exempted new machinery and equipment (M&E) from property taxation. The final bill included partial reinstatement of the LAVTR fund because the M&E exemption would harm local budgets. Yet, cities and counties did not receive LAVTR payments.
Allen County Commission’s desire to not raise property taxes is becoming increasingly challenging. The loss of other funding streams (like M&E), exponentially increased costs of materials and labor, and the various other unfunded mandates being placed on the local level by the state have driven up the cost of maintaining our county.
However, I credit our ability to not raise property taxes even more to the diligence of my fellow commissioners and staff, alternate funding sources such as grants, and quite frankly doing more with less. In fact, over the past 4½ years that I have been on the Commission, we have fought to keep our mill levy static, thanks in part to some increases in valuation.
But inflation continues to cause costs of doing business to increase and, as we battle population decreases in rural Kansas, we are at the limit of doing more with less. It is once again time for the Legislature to do what it is legally obligated to do and start funding LAVTR.
The May 2023 memo of the State’s Consensus Revenue Estimating Group predicts a $109.3 million, or 4.1%, increase, in FY2024 tax collections by the State over this year. And this year’s collections are predicted to be 24.2% higher than last year — FY2022. Likewise, the state budget recommends an ending balance in the state general fund of $1.98 billion, or 20.9 percent of expenditures in 2024. It also recommends a $500 million deposit into the budget stabilization fund that will bring the fund balance to $1.51 billion. These predictions put the Kansas Legislature in a position to help taxpayers and local governments.
Understandably, the governor and legislators have many priorities that require funding. However, in the upcoming legislative session, I ask that my fellow citizens advocate for funding LAVTR in consideration of the work of locally elected government leaders who have respected taxpayers’ plight and tried to hold property taxes steady while continuing to provide services for our community. Please contact our state officials before the next year’s legislative session begins in early 2024.
Our local state lawmakers’ contact information is:
Sen. Caryn Tyson, Topeka Phone: 785-296-6838; email: [email protected]; home address, P.O. Box 191, Parker, KS, 66072, home phone: 913-898-2366P;
Rep. Dr. Fred Gardner, Topeka Phone: 785 296-7451; Email: [email protected] and [email protected]; home address, PO Box 275, Garnett, KS 66032, home phone, 785-448-2773.
Also, Gov. Laura Kelly, Capitol, 300 SW 10th Ave., Ste. 241S, Topeka, KS 66612-1590, phone: 877-579-6757
