State eyes utility tax for revenue
This past weekend, the Legislature began working on a school financing bill that has some impact on your future utility bills. We want you to be aware so that if you want to contact Sen. Rick Wilborn or Rep. Don Schroeder, you will have the chance.
The bill is SB 251 and the proposed bill is to add $2.25 to each residential customer’s utility bill for water, electricity and gas service. Additionally, the bill will impose a $10 fee for commercial and industrial customers.
It is proposed, if passed, that the fee would start Sept. 1, 2017.
This bill can have an interesting impact on landlords. Yes, you are providing a residential property to a renter, but the account is classified commercial so you or your tenant will be charged the $10 fee. If your tenant leaves and the service reverts to you, the $10 fee will be yours to continue.
Depending on the way the bill is written, if the property is vacant or there is no utility consumption, this charge may continue to be assessed to you.
The way this bill is being described, all utility providers will be required to pay this fee. It will cover all the investor-owned utilities, such as Westar and KCPL, the rural electric co-ops, such as Flint Hills, the gas companies, such as Atmos, and the municipals like us.
A recent article in The Hutchinson News says that those that have a water right will be charged as well. Since I don’t know the full impact of the bill, it is possible our rural irrigation friends will have a water right fee and a fee for the electric pump. There is a situation the Legislature needs to address unless they already have and I am not aware.
To add more fun to your reading. I heard at yesterday’s Kansas Power Pool Board meeting that the representative from Augusta is asking for a full review of sales tax exemptions. One thing that could go back on the table—like the item above—is the exemption for residential sales tax on utilities. If you had a $300 monthly utility bill, you could be paying an additional $20-plus for service.
Remember, the City of Hillsboro will just be the conduit for those fees—we won’t be able to keep any part. At our expense, we will have to change our utility billing procedure, collect and report the revenue collected.
We know that many of our customers will be upset when the fees are imposed. Those conversations will not be fun, but they will have to be addressed.
So, if you want to express your opinion to the legislature, be our guest.
Larry Paine
City administrator
Hillsboro
