County issues open letter to Rep. John Barker

Open letter to:

Rep. John Barker

State Capitol, Topeka

Marion County stands in strong opposition to the tax lid enacted during the 2015 session. This legislation was never presented as a bill during the regular session, and never received a public hearing. The concept was added as a floor amendment to the tax bill in the final days of the session.

The Kansas Association of Realtors labels this bill as a public vote on the issue of increasing property taxes. They say this is the ?ultimate local control??allowing citizens to vote for the property tax increase. How?ever, the election process outlined in the 2015 legislation does not work with the statutorily prescribed budget process.

KAR has proposed fixing one date in its 2016 legislation, which it argues will fix the election concerns. It does not. The budget process outlined in Kansas statute begins with appraising property in the county at the beginning of the year and cumulates with mailing the tax statements to taxpayers at the end of the year.

Altering one date within the domino-effect of dates does not fix the issue. Thus, the legislation becomes a solid tax lid, and not an election to determine taxes, as it is billed.

Counties are funded by two primary sources: property taxes and sales taxes. Sales tax is very limited, as it is capped at 1 percent and must be split with the cities abiding within the county.

Counties are a partner to the state and provide state services, such as valuing property and collecting taxes, registering motor vehicles, prosecuting state crimes, paying for courts, providing public health and mental health programs, and the list goes on.

In recent years the state has shifted its responsibility and costs to counties: eliminating the mortgage registration fee, eliminating the oil/gas valuation depletion trust fund, eliminating funding for the Local Ad Valorem Tax Reduction and other revenue-sharing programs, eliminating taxation of machinery and equipment, granting tax exemptions, sending felons to county jails, assigning costs of sexual predators to counties, shifting the burden of mental health funding to our community mental health centers and our jails.

From 1991 through 2010, the demand transfers of LAVTR, CCRS and SCCHF were eliminated to the tune of $1.15 billion. These funds were created to replace taxing authority that cities and counties had?we gave up this taxing authority and allowed the state to collect the taxes; the state, in turn, was supposed to share the tax revenues. The LAVTR fund was squarely aimed at reducing property taxes at the local level.

As stated, local government gave up various taxing authorities to the state in order to stabilize certain taxes statewide. The state, in turn, was to distribute taxes gleaned to local governments by a prescribed formula. This was initiated as far back as the late 1930s and worked successfully until the early 1990s.

At that time the state started withholding some of these tax dollars from local governments to aid the state with its own budget issues. This action continued through the years and finally culminated in 2004 with the state withholding all these funds for its use, and has not made a payment since.

It is important to note that this violates existing state statutes. Taxes are being levied in accordance with state statutes but are not being disbursed in accordance with the same statutes.

This situation cannot be treated as an oversight as some legislators claim. Every year each legislator receives a briefing book to bring legislators up to date on various issues facing the state. The situation with demand transfers is described in detail each year, yet we know of no elected official who has stepped up to the plate to correct a violation of ?state law.?

The KAR asserts that property taxes are high, and interestingly starts its analysis in 1997, at the end of the 1990s tax lid and the end of demand transfers, resulting in an exaggerated increase in property taxes.

Over the last 10 years, 2004-14, the county per-capita tax increase was 8.71 percent. The county per-capita tax in 2004 was $389 and in 2014 it was $423. We agree that property taxes are high and we must get a handle on it.

The KAR has decided that local government is solely responsible, and thus must be reined in. We find it alarming that the legislature and governor are listening to a profit-motivated group and choose to ignore input from all levels of local government state wide that find the tax lid a disaster in the making.

Marion County feels legislators need go no further than the Statehouse lavatories and look in the mirrors to identify the culprits. The state alone is primarily responsible for the following factors that have driven up property taxes statewide:

? Significantly reduced revenue to local governments by not meeting statutorily required demand transfer payments. To replace the subsequent lost revenue local government?s only option is to increase property tax.

? Large scale tax exemptions to many entities. This reduces a local government?s tax base, and the only way to replace the lost revenue is again to raise taxes on the remaining property owners.

? As described above, the transfer of many state responsibilities to local governments without any form of funding assistance from the state. Again, funding for these programs by increasing property taxes is local governments only option.

If our county cannot raise the necessary revenues to support services, the services will be cut. Our citizens will see a decrease in local government services and they will not have the opportunity to vote on that decision because a realistic election procedure is not included in this legislation.

If the state would start making statutorily required demand transfer payments and repeal tax exemptions granted since 2002, Marion County could reduce its mill levy by up to 30 percent and meet its obligations.

The tax lid, on the other hand, would do nothing to reduce taxes; it would simply result in increased expenses and reduced services.

If the Kansas Legislature believes citizens should vote to approve tax increases, why was there no statewide public vote on the historic sales tax increase last year?

County commissioners are elected by the same people who would vote on the property-tax increase. We trust that our voters made the right decision when they voted for their state legislators and county officials.

We ask that you repeal the 2015 legislation and return our state to the principle that the government closest to the people is the best. Citizens will vote for the county officials that represent their values in determining the budgetary needs of the community.

This letter is being sent as an ?open letter? to you, intending it be published in local newspapers. As commissioners we feel we and your constituents in Marion County are owed a definitive written response?which will be published?to the concerns and points delineated above.

This is an election year and thus Marion County citizens would be afforded the opportunity to have a public vote on property tax issues in accordance with KAR?s wishes.

Marion County Board

of Commissioners:

Randy Dallke, chair

Lori L. Lalouette, member

Dan Holub, member