Saying the debate that led to the decision was based on misinformation and did not follow proper procedure, Prairie Village Mayor Eric Mikkelson on Monday sharply criticized the city council’s decision last month to override a recommendation from the finance committee to reduce the property tax rate by 1 mill for 2020.
Mikkelson — who as mayor does not vote on such issues unless there is a tie on the council — had vigorously lobbied for the proposed property tax rate reduction, saying that it would provide some financial relief for homeowners who have seen their real-dollar tax burdens jump significantly in recent years as home values have gone up and up. Even with the mill rate reduction, many Prairie Village homeowners would see their actual property tax outlays to the city go up next year based on the year-over-year increase in their home’s value.
During his mayor’s report at this week’s city council meeting, Mikkelson said he felt compelled to address the matter, particularly a piece of information that had been presented by Ward 3 Councilman Tucker Poling that appeared to be persuasive in the debate. At the council’s May 20 meeting, Poling distributed a spreadsheet showing that the impact of a 1 mill property tax rate reduction on an average homeowner would be about $39 a year. For First Washington Realty, the company that owns the Village Shops and Corinth Square, however, the decrease would save about $20,000 a year, Poling argued.
That assertion proved to be misleading, Mikkelson said. In fact, First Washington and other commercial property owners pass property tax charges through to their tenants, meaning that in reality the decrease would have provided relief to local business owners — not the out-of-state property owners.
“First Washington passes through property taxes directly to the tenants, which means this tax increase hurts locally owned mom and pop shop owners,” Mikkelson said.
Moreover, Mikkelson said he was troubled that members of the council would have introduced such information and a motion to override the recommendation of the finance committee so late in the budgeting process.
“The premise of this proposal to increase the taxes [from the finance committee’s proposal] was not only contrary to our hard working finance committee’s recommendations, it was based on false assumptions and data and bad procedure,” Mikkelson said.
Finance Committee Chair Dan Runion echoed some of Mikkelson’s concerns both in person and in writing, saying that additional arguments raised during the debate — including the potential loss of revenue if “dark store theory” valuation for commercial property were to gain traction, or in the event of an economic downturn — had been taken into consideration during the finance committee’s work to come up with the recommended budget.
Runion authored a letter to Mikkelson last week that provided additional details on some of the claims made by other members of the council ahead of the vote May 20. That letter is embedded below.
The council will consider its final 2020 budget for approval in the coming weeks.