One issue that begs revisiting by legislators this year is a measure passed in 2015 that limits how much cities and counties can spend monies garnered from property taxes.
The new law, which was to be enacted in 2018 but now is being steamrolled to take effect in July, says that if a city or county experiences an uptick in property taxes that exceeds the rate of inflation, then that governing body needs voter approval to spend the windfall. Or face lowering property taxes accordingly.
Meanwhile, receipts from the state continue to decline.
Time was, the state reimbursed cities and counties a percentage of revenues collected from the sale of cigarettes and malt beverages as well as that collected on the motor vehicle property tax and motor fuels tax.
Established in 1965, the agreement — classified somewhat disingenuously as “state aid” — was that these municipalities would send all such revenues the state’s way, with the understanding that they would get a small percentage of receipts back. Two such revenue sharing programs were devised, amounting to about 6 percent of sales from the categories mentioned.
Since 1997, both agreements have been significantly abused to the detriment of cities and counties, resulting in lost income of more than $2 billion, according to the League of Municipalities.
So you can imagine the outcry from local administrators to now have the state say that if their area does experience a windfall — say Enbridge builds a pipeline in the neighborhood — then the resulting boost in property tax income cannot be spent unless the public approves it at the next election. Exceptions to the rule include revenue targeted to new infrastructure — roads and bridges; or to pay down debt or settle a legal judgement.
THREE THINGS about the law stick in one’s craw.
First is the heavy-handed approach by state legislators on how locals can or cannot spend local receipts.
Second is the unwieldy requirement to hold an election to get voters’ approval. Municipalities typically receive their property valuations in July with budget hearings the first of August. If local authorities deem the new money necessary for their upcoming budget, putting the measure on the August ballot would be impossible.
And considering last year’s rate of inflation was practically nil, any uptick in property values would necessitate such a vote.
The third thing about the measure is that it’s regressive. Capping spending to the rate of inflation is an arbitrary figure totally irrelevant of an area’s circumstances and needs.
Our local officials are elected to make decisions to take us boldly into the future. Topeka should give them that freedom.
— Susan Lynn
