JoCo commission approves $1.25 billion budget that holds mill rate steady — but worries about revenue linger

Roxie Hammill - August 9, 2019 11:31 am

With no small amount of angst, the Johnson County Commission approved a $1.25 billion budget Thursday.

Commissioners repeated their concerns about upcoming court cases involving the property valuations of commercial properties that are under appeal, but ultimately gave a final okay for a budget that keeps the taxing rate steady at 26.013 mills as property values have increased.

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“It’s seven people trying to come together to look out for the overall interests for the county and it takes compromise. None of us are getting everything we wanted in this budget,” said Commissioner Steve Klika.

Commissioner Mike Brown voted against the budget, saying the county was not planning sufficiently for the potential loss of revenue from “dark store theory” appeals.

With the budget haggling over such things as parks and public transit completed, commissioners focused their comments Thursday on the potential of a crisis if big box retailers win their push to lower property values and other retailers follow suit. Several national corporations have won tax board appeals that challenged the method the county appraiser used to assign a value to their stores for taxing purposes. If they win the ensuing court appeals, the county, schools and cities could face shortfalls of at least $133 million, according to an analysis prepared last winter by the appraiser’s office.

Commissioner Mike Brown, one of two votes against the budget, expressed disappointment that the county has not enacted a plan in case the stores win retroactive tax refunds. He called the budget “reckless and irresponsible.”

“The taxpayer has been misled in my opinion by a disingenuous charade perpetrated by a former county appraiser and possibly others and it happened right before our very eyes,” he said.

Former county appraiser Paul Welcome, who retired this year, has said that he followed the Kansas state guidelines in setting commercial property values. Commission Chairman Ed Eilert pointed out later that Welcome received high marks from professional appraiser associations.

Commissioner Michael Ashcraft, the other no vote, interjected a calming note. Ashcraft recalled the worry five years ago over the phase-out of a paperwork filing fee on mortgages and the expected shortfall then. The county has managed to deal with those repercussions, he said.

“Mr. Brown raises legitimate concerns but I have no doubt we will survive it. It may be painful, it may be difficult at some venues, but we will get through it,” he said.

Commissioner Jim Allen was sanguine, pointing out that the county has delivered top quality services for its residents and has maintained itself as a place where people want to move. Continuing to support parks and libraries has been the right thing to do, he said.

Chairman Ed Eilert also said the dire predictions of lost revenue don’t take into account the developments now under construction that will eventually add to the tax rolls.

Before the vote, county budget director Scott Neufeld told commissioners it could take two more years for the first cases to make it to the Kansas Supreme Court. Although the county doesn’t have an immediate contingency plan, he said reserve funds could be a short term option. He mentioned the health care reserve as a possibility but added that it’s subject to sudden spikes in claims.

Commissioner Becky Fast said she’d doesn’t like the idea of using reserves because they should be set aside for disasters like floods and tornadoes. “Reserves are when you have those kinds of extreme events, not for making up budget deficits.”

However Fast said her constituents have been concerned and asked for more information. The commission will schedule a study session on the topic later this year.

The county budget is only part of a homeowner’s total tax bill. Most of the property tax dollars go toward schools, and cities also take a piece.

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