From the Mayor 07/06/16
Reprinted with permission of the Independence Daily Reporter
Your three commissioners must make many difficult and unpleasant decisions, but budgeting and taxes are right up near the top of that list. Several people that I respect very much have encouraged me not to write about property taxes, but in my opinion, open discussion on this topic is a must.
So here’s a bit of background to start the discussion.
The deadline. There is a state statute requiring that we hold a public hearing to approve the 2017 budget on or before August 15th and we must publish the budget 10 days before the public hearing. So the budget must be finalized and published within 30 days from today.
The mill levy. You can’t discuss property taxes without talking about our mill levy. A mill levy is equal to paying $1 in taxes per $1,000 of “assessed” value on your home or property. And the “assessed” value of your home is approximately 11% of its appraised value. So, if your home appraises at $100,000 and you have a total mill levy of 40, your real estate taxes will total $440 (that is $100,000 x 11% x .040). If your home is appraised at $1,000,000 and you have the same mill levy of 40, your real estate taxes will total $4,400. I use that example in jest because we don’t have a profusion of million dollar homes in Independence, whereas other cities such as Boulder, Colorado and Leawood, Kansas do. Those cities can get by with a much lower tax rate, because their actual tax revenues will be so much higher due to the high property values.
When comparing Kansas to other states, we rank in the upper half in property tax rates. The states range from Hawaii being the lowest to New Jersey being the highest. Kansas ranks at number 37, meaning that there are 36 states that have a lower average property tax rate. If you look at actual taxes paid, Kansas ranks squarely in the middle at number 26, as our average home price is low compared to most states. The average Kansan paid $1,825 in property taxes this year; Alabama was low at $538 and New Jersey was high at $7,335.
Every time the topic of property taxes comes up, someone reminds me that there are many people on fixed incomes and they just can’t afford an increase in taxes. I get that, I really do. Unhappy taxpayers often tell me that I can’t possibly understand their financial worries, since I’m married to a doctor. I understand why they feel that way, but Annie was not a doctor for the first 20 years of our marriage. At one point in our marriage, we were both unemployed for nearly two years, with two babies, and that’s a horrible place to be. I still have vivid memories of being unable to pay the bills, with no hope in sight, both of us crushed with exhaustion but unable to sleep at night because of the worry.
But the fact that money is in short supply for many people doesn’t negate the fact that we have a responsibility to take care of our city. We have a beautiful city today, and that is due 100% to the money that was spent in the past. The residents of Independence built our beautiful city hall 100 years ago. They built our water plant some 50 years ago. They built our sewage plant many years ago, and built it again after the flood in 2007. They built our amazing swimming pool in 2004.
Our predecessors left us a wonderful legacy.
What legacy are we leaving to future citizens?
Will we leave them water that is not safe to drink, collapsing sewer lines, a non-functional City Hall, poorly maintained streets, and toppling downtown buildings?
I know, I know. All taxes are too high. City, County, State, Federal. Believe me, I also feel that my taxes are too high.
But I’m asked constantly what the city is going to do about the streets, the water plant, City Hall, etc. All these things cost money.
Below is the Independence mill levy for the past 10 years.
As you can see from the list above, the mill levy decreased or stayed the same every year from 2006 to 2015. Our past city commissioners felt that it was very important to hold the tax rate as low as possible, and never increase it. I’m certainly not criticizing them; I also want to keep it as low as is reasonable.
But the simple fact is that our beautiful city has tremendous maintenance needs, many of which have been ignored for years, and they all take money. You can’t run a park like ours without money. You can’t run a zoo without money. You can’t provide police and fire protection. You can’t resurface streets. You can’t keep maintaining things with the same amount of money year after year, as prices for everything you buy rise every year due to inflation.
How does Independence compare to others cities in Kansas of similar size? The table below lists cities of similar size, as well as a few neighboring cities, along with their mill levy. Take a moment and check it out.
At the current mill levy of 47.079, if your home is worth $80,000 then you will pay around $414 in taxes to the city ($80,000 x 11% x 0.047079). If we raised the tax rate by one mill, it would increase your taxes by $8.80 per year ($80,000 x 11% x 0.001).
Should our mill levy be increased, decreased, or stay the same? If you were a city commissioner, what would you do?
Mayor Gary Hogsett