UG tax cut appears unlikely at this time

A tax cut does not appear likely after hearing Unified Government commissioners’ comments at Thursday night’s budget meeting.

UG Chief Financial Officer Kathleen VonAchen presented two options for the commission with slight tax reductions.

She had been asked by Commissioner Melissa Bynum and other commissioners to present some options of what a tax reduction would look like.

While Commissioners Jim Walters and Tom Burroughs were in favor of cutting taxes, some of the other commissioners were not, at least not at this time.

Commissioner Brian McKiernan said these options were coming “late in the game” for the 2022 budget. The UG Commission is scheduled to vote on the budget next week.

The local government is still getting back on its feet from a cash flow perspective currently, he said, and the UG needs to invest more in infrastructure, he said. He was in favor of “staying the course” for the 2022 budget, and considering a tax cut in the 2023 budget.

The administrator’s proposed budget of over $400 million kept the same mill levy rates as last year, however, the assessed valuations have gone up throughout the county, which could result in a slightly higher tax bill for some residents.

Commissioner Angela Markley agreed with Commissioner McKiernan. When the commission lowered the mill levy by 6 mills previously, in different years, it did so as part of a long-term strategic plan, according to Commissioner Markley. She said she would like to UG to look at a longer-term strategy for reductions in the future.

Commissioner Christian Ramirez agreed and said he felt personally frustrated, that this information should have been brought to the commission months ago. Since budget adoption is scheduled a week away, he said he could not vote on it in that time and needed more time to go over it.

“Since the budgeting season started, I have at every opportunity suggested that we consider reducing the mill levy,” Commissioner Walters said. The fact that the staff didn’t respond to it until tonight, and then commissioners were reasonably concerned about the late-breaking information, was disappointing to him, he said.

He talked about the large reserves that are planned for the 2022 budget.

“It appears we have just gotten caught flat-footed and don’t have projects that we think are ready to go, even though millions of dollars from ARPA have been in our possession for months,” Commissioner Walters said.

He said he didn’t want to completely redo the budget, but if they consider a mill levy reduction and change nothing internally in the budget, except reducing the reserves, it would have no impact on anything that has already been presented, but would give taxpaying residents some relief.

To the point that reducing the mill levy is a long-term goal, Commissioner Walters said it’s a one-year commitment. The commission will have the opportunity to adjust the mill levy in later years.

“I’m not convinced by anything I heard tonight that we should not consider a mill levy reduction,” he said.

Commissioner Bynum said the options presented by Von Achen on Thursday night were the result of the mayor asking commissioners two meetings ago to send in questions. She sent in questions about the effect of a 1 mill reduction on the county side, and a ½ percent off the PILOT (payment in lieu of taxes) fee on the Board of Public Utilities’ bill.

She added she had been asking for a mill levy reduction for a number of years also. She said it was worthy of more consideration. She added she is going on record to have serious, deliberative and strategic conversations about tax relief for the 2023, 2024 and 2025 budget. If the commission doesn’t come to a consensus for this budget cycle, it should start early for the next one, to consider bringing some level of tax relief to the community, she said.

Commissioner Tom Burroughs said in his experience, he has seen budgets presented in a manner where things they hold dear are hurt or damaged because of a reduction in funds. Calling out the jail or employee wages pulls at people’s heartstrings, he said, and then they say they can’t do that.

The 2022 UG budget includes an amount below $30 million in American Rescue Plan Act funding, out of a total of $79 million being received by the UG from ARPA, according to UG officials.

Commissioner Burroughs suggested the UG could generate revenues in the community by putting people to work, and getting the funds out to the community, instead of putting them in the reserves.

“Every year we are told we are broke, there’s no money and we can’t do anything,” Commissioner Burroughs said. However, this year they are sitting on cash, with extra funds available, he said.

“I am supportive of a mill rate reduction in the county and city,” Commissioner Burroughs said. “Our budget can absorb it.”

Commissioner Gayle Townsend said she agreed more with Commissioners McKiernan and Markley. The UG is the only entity that is charged with supplying major services such as infrastructure and public service, she said. Only after it does that, should it start to cut the mill rate, she said.

In the past, when the UG Commission cut the mill levy rate, it did not result in a decrease in the checks that taxpayers were writing, she said. It was a combination of the valuation increasing and other taxing entities setting their mill rates, according to Commissioner Townsend.

Commissioner Harold Johnson said other taxing agencies in Wyandotte County should be having the same discussion about reducing the mill levy. The city and county mill levies, that the Unified Government sets, are only 46 percent of the property tax bills, he noted. Schools, the community college and library levies make up the rest of the property tax bills. There needs to be a conversation with these other groups in the future, he said.

Mayor David Alvey discussed a chart comparing Wyandotte County to other jurisdictions, including Johnson County. He said the infrastructure is older in Wyandotte County, requiring more repairs. The county doesn’t have the funding now to fix all the curbs and have the storm sewers it needs, according to the mayor. Fifty-nine percent of the UG’s budget goes to public safety, he said, and no one is asking for cuts in public safety coverage.

Also, 70 percent of the UG budget goes to employees, he added.

Mayor Alvey said residential tax reductions would have to be several hundred dollars before people would notice them. A one-mill reduction would save a resident of a $500,000 home about $57 a year, he said. But one mill generates revenues that would pay for about 10 miles of road for the UG, he added.

Commissioner Jane Philbrook agreed with Commissioners Johnson and Ramirez about meeting with other jurisdictions. She added that Commissioner Bynum has been advocating for that since being elected. She said she hears from constituents about the need for good roads, code enforcement and safe parks.

Commissioner Mike Kane said he was concerned that they were still in a pandemic, and they don’tknow what will happen in the next 10 to 12 months. He also said a lot of employees are leaving the UG and 3 percent raises were not enough.

He also wanted more time to work on a strategy, and said one week was not enough. He thought they should start soon, and figure out in January what they can do for next year.

The UG Commission didn’t take any official action on the budget at the meeting Thursday, and could make changes if they wanted next Thursday.

The commission took a nonbinding straw poll on whether to add an investigator position in the Sheriff’s Department, after a presentation by Sheriff Don Ash. The position was recommended by Sheriff Ash, who talked about the increasing number of crimes being investigated by the Sheriff’s Department, including crimes at the local parks, which the Sheriff’s Department has jurisdiction over.

Commissioners voted unanimously in the nonbinding straw poll to fund the additional investigator position.

Another nonbinding straw poll that received unanimous approval was moving $250,000 from the parks operations fund balance to pay for a modified park on Hutton Road near the new Piper fire station. The idea was proposed by Commissioner Kane.

Running for re-election in November are Mayor David Alvey, Commissioners Tom Burroughs, Gayle Townsend, Mike Kane, James Walters and Jane Philbrook.

The UG Commission will have a public hearing on exceeding the revenue neutral rate and a final budget public hearing at 5 p.m. Tuesday, Sept. 7. The meeting will be at the fifth floor meeting room at City Hall, 701 N. 7th St., Kansas City, Kansas. Because of the risk of COVID-19, the public has been seated in the City Hall lobby, where they can make comments. The meeting also have been on Zoom and accessible by telephone.

Then, the UG Commission is scheduled to adopt the budget at 7 p.m. Thursday, Sept. 9.

For information about access to the meetings, visit https://www.wycokck.org/Departments/Clerks-Office/BOC-Virtual-Meeting.

The budget details are contained in a budget book of almost 1,000 pages online at https://xfer.wycokck.org/public/file/XwtZzjJiCUWudaJv1Z2WUw/Unified%20Government%202021%20Amended%202022%20Proposed%20Budget.pdf. There is also a slide presentation about the budget online at https://www.wycokck.org/files/assets/public/finance/documents/2022-administrators-budget-presentation.pdf.

Thursday’s UG Commission budget discussion is online at https://www.youtube.com/watch?v=bBH8GamvxhY.

To see an earlier story on the UG budget, visit https://wyandotteonline.com/federal-funds-playing-a-role-in-2022-ug-budget/.