A property tax increase might be on the way for Overland Park residents.
City Manager Bill Ebel has recommended a 2022 budget that would add one mill to the taxing rate as well as accept revenues already expected from rising valuations.
The total budget for the next fiscal year would be $327.4 million, a 6.5% increase in operating expenses over the current year.
A mill equals $1 of tax per each $1,000 of taxable value.
The addition of personnel for new public safety mental health services, police and fire, the arboretum visitors’ center and cyber security were cited as the main reasons for the tax rate increase.
The city’s recovery from the pandemic downturn also poses some questions about future revenues.
The city is still in an “austere environment,” Ebel told a city council committee of the whole Monday night, adding that this was the most significant budget presentation since 2011, when cities and businesses were trying to climb out of the Great Recession.
“We’ve lost a year and we’re starting over,” Ebel said.
Proposed tax increase details
The mill increase would bring the city’s levy to 14.582 mills and add $4.2 million to revenues for 2022.
That means, for a home with an average appraised value of $350,000, property taxes would increase about $40 to $587.
The owner of commercial property valued at $500,000 would pay $125 more per year. On the high end, taxes for a property appraised at $25 million would increase by $6,250 per year.
At the same time, assessed valuation set by the county appraiser is going up by 2.7% for 2022.
The stormwater utility fee charged per “equivalent residential unit” would rise from $33 to $36. The increase will be used to start a fund for dredging and maintaining six city-owned lakes.
What the increased taxes would pay for
More and better mental health response in public safety was the centerpiece of a year-long study by a special task force.
It was created, in part, to address policies in the police shooting death of 17-year-old John Albers in 2018. Albers was struggling with mental health issues when police were called to check on him. A now-former police officer shot and killed Albers as he backed the family’s minivan down the driveway.
The 10% operating budget increase for public safety in Ebel’s recommended budget was the largest of any budget area.
The increase would cover, among other things, the addition of 14 employees in the police behavioral health unit to cover crisis intervention training for police, a victim advocate and mental health services for first responders.
Those additions were embraced by the city council last month. Other investigative and technical staff is also proposed to be added.
Councilmember Chris Newlin, chair of the task force, said he believes the mental health unit will provide a good value for residents who support the mental health agenda.
“When they understand the value they’re getting with this they’re going to be supportive,” he said of the proposed tax rate increase.
Mental health is not the only area where Ebel penciled in additional staff.
The proposed budget calls for 74 more employees, bringing the city’s total to 1,180. The budget envisions additional police and fire staff, plus 11 full-time equivalent employees to staff the arboretum visitor center once it is built. Another three would be added to beef up cyber security.
Twenty-one of the added positions will be paid for by the county rural fire district 2, as part of an impending merger.
Chip seal issue not addressed
Not directly discussed was any change to the chip seal method of road maintenance that has proven controversial.
An infrastructure advisory panel will begin meeting this year to look at all infrastructure needs, including road resurfacing. Some residents and homeowners associations have objected to chip seal because the asphalt and rock surface it creates can be messy and cause injuries to people falling on it.
The 2022 budget was written under the shadow of economic setbacks from 2020.
Overall, the city lost $14 million in revenue from 2019.
Money from the hotel room tax plummeted by about half during the pandemic year, for instance. Although it is expected to begin to rebound this year, revenues still are not expected to match 2019 for two more years.
The convention center also lost $2.6 million last year, and may still run at a loss this year.
Sales and use tax also bear close watching, Ebel said, although the 3.9% decrease last year was not as bad as predicted.
What happens next
Councilmembers received the budget proposal without taking action Monday, but there was a brief discussion about alternatives to a tax increase.
Councilmember Faris Farassati asked Ebel to take a “surgical view” of the budget and provide some other options so a tax increase could be avoided.
“I fail to understand how the most important characteristics of this city, the budget, cannot be further evaluated by this staff,” Farassati said.
However, Ebel said he couldn’t analyze cuts in spending without more direction from the council, and the possibilities of additional revenue are slim.
Councilmember Curt Skoog, who is vying with Farassati in a four-person mayoral primary this summer, said it’s up to the councilmembers to ask more specific questions.
“To ask staff to do your job is a little curious to me,” he said. “Asking a generic question that has no basis in anything except for politics is fruitless.”
Farassati insisted he was only looking for unexplored possibilities in addressing the budget.
“Let’s just open our minds to new ideas,” he countered.
The city manager’s proposal is only the first step in the budget process.
Next, the ideas will be reviewed by council committees before the full council decides next month on a version to adopt for the purpose of a public hearing.
If the council goes through with tax levy increase, there will be an additional public hearing required by a new state law.
That new law replaces the property tax lid unpopular with many local governments.
If a taxing body adopts a budget that is not “revenue neutral” — meaning it does not result in tax increases either from the levy or rising property values — a second public hearing is required.
That public hearing would be Sept. 13, with the final budget vote Sept. 20.