CHANUTE — Chanute may eliminate property taxes as a means to generate revenue for future budgets.
City Manager Todd Newman proposed this week what would be a radical departure from what the city has done for generations, by eventually doing away with most of the 43 mills from its ad valorem tax levy.
The proposal came at a budget workshop Monday evening, the Chanute Tribune reported.
Newman suggested finding a way to do away with about 37 mills of the 43-mill levy Chanute imposed for this year.
The 37-mill reduction would equate to about $2.2 million, the Tribune reported.
Newman noted only about 3.3% of the city’s budget comes from property taxes, and there were years in its 150-year history that the city could operate entirely on utility revenue without a property tax, the newspaper reported.
The remaining 6 mills of the city levy would remain and go to the library.
Newman proposed phasing out the property tax over three to five years, the newspaper said.
Commissioners were noncommittal, but intrigued.
Commissioner Tim Fairchild noted such a plan would set Chanute apart from other communities, while Commissioner Phil Chaney said the levy should be dropped quickly, to prevent other taxing agencies from upping their levies.
“Dropping it all at once scares me,” Mayor Jacob LaRue said.
The goal is to have no tax while still having affordable utilities, Newman said.
He will put his plan in writing prior to a July 19 commission meeting, when the budget is set.
