Overland Park taxpayers could see their property taxes jump 9.7% for fiscal 2023 — on top of a 10.4% jump this year — because Mayor Curt Skoog and city staff are proposing to spend a lot more.
Council President Paul Lyons said via email that the increase is not an increase in the tax rate but rather because of the increased assessed valuation of properties in the city by the Johnson County Appraiser’s Office.
Lyons stressed the budget presented at a recent “Committee of the Whole” meeting is preliminary.
“This is the first time the council has had an opportunity to see the proposed 2023 budget from staff,” he said. “The next step in the process will be for each goal area committee to review their section of the budget proposal and make adjustments as needed. A final budget will not be voted on until later this year. It is likely to change before then.”
That the June 6 meeting was the first time that the city council and Mayor Skoog see the proposed budget indicates that staff was given no guidance by elected officials. Dave Trabert, CEO of Kansas Policy Institute, The Sentinel’s owner, says elected officials put government’s interest ahead of taxpayers when they don’t direct staff to keep taxes as low as possible.
“Staff indicated at the June 6 meeting that the budget proposal was prepared in accordance with council policy. They gave no indication they were given direction or made any attempt to prevent another big tax hike.”
The Overland Park General Fund operating budget will have gone from $109.7 million in 2020 to $145.8 million if this budget is adopted as proposed.
There is a proposed $71.5 million ending balance — or 49% of general fund spending. That would be nearly triple the average school district carryover of 18% and six times the 7.5% of General Fund spending the state recommends by statute.
Lyons said the state recommendations are low and that “Overland Park has a long-standing policy to maintain a 30% ending fund balance reserve.
“The proposed budget includes a 5-year projection of expenditures showing the ending fund balance being spent down to reach the 30% objective.
Lyons said the state recommendations are “insufficient” and noted, ” They have a poor track record managing budgets in past economic downturns.”
“I believe our reserve fund policy is appropriate and prudent to protect the city from unforeseen economic circumstances,” he said. “Anything less is too small. We could not have maintained essential city services during the 2008-2010 great recession without this reserve fund amount.”
Trabert says city financial statements refute that contention, however.
“During the Great Recession and the government-imposed COVID shutdown, the decline in revenue wasn’t even close to what Overland Park held in reserves. And an outsized spending hike over the next five years is the reason they predict the ending balance dropping. The city’s 30% ending balance target indicates an unwillingness to manage costs.”
However, Lyons did agree that a 49% ending fund balance is “too high.”
“That’s why I support reducing the mill levy,” he said. “The council needs to determine whether the percentage ending balance should be brought down through spending on high-priority needs or through a reduction in taxes. That is to be determined.”
During the Committee of the Whole meeting where the budget was presented, however, Mayor Curt Skoog and staff acknowledged that the budget is based on policy, not needs and efficiency.
“I guess my point is all of those items on page 11 that you use to prepare the budget are based on…previous councils’ direction on standards and how we should approach that. Is that correct,” Skoog asked a staff member and received an affirmative answer. “So as we move forward if council members have interest in addressing those, you know, that’s a policy decision that we can talk about. But that’s how the budget is prepared.”
Skoog won’t talk about the big tax increase
The proposed 2023 budget increases general fund spending by 10 percent. Spending jumped 33% over the last three years, and payroll has increased 31% over the same period.
Lyon suggested in the meeting reducing the mill levy by at least one mill, given the increase in valuation. One mill in Overland Park raises about $6 million, and that much of a reduction would drop the property tax to about 1%.
“It is too early to tell whether the council will agree to roll back the mill levy,” Lyon said. “I support rolling it back, but I don’t know whether enough support exists on the council to do so. We will get a better picture of the council’s position as the budget is reviewed in each goal area committee over the next few months.”
Governing bodies are not required by state law to adopt year-over-year revenue neutral mill rates, but thanks to Truth in Taxation legislation, they must hold a public hearing on the increase and then actually vote on the entire property tax increase.
The Sentinel also reached out to Skoog to ask about the budget but has received no response.