Jun 10, 2021 5:00 PM

🎧Barton Community College making sense of SB 13 taxing changes

Posted Jun 10, 2021 5:00 PM

Great Bend Post

Barton Community College, like all taxing entities in Kansas, is trying to get familiar with the ins and outs of Kansas Senate Bill 13 that was approved by Governor Laura Kelly in March. The bill affects how taxing entities set their budgets by establishing base levy limits and additional public hearing requirements to raise tax increases.

A Revenue Neutral Rate (RNR) is calculated yearly and taxing entities must declare if they will accept or exceed the rate. The Revenue Neutral Rate is defined as the tax rate for the current year that would generate the same property tax revenue as levied the previous year.

Mark Dean, the college’s vice president of administration, says the problem with the bill is in the wording.  

"If they would have just said Revenue Neutral, they would have been fine," said Dean. "They said Revenue Neutral Rate. The difference in that is...if we wanted to stay revenue neutral and we collected $5 million last year, we would collect $5 million this year. But what they did is give you a rate, which is the mill levy. The rate is given to you before the valuation is actually known."

Another issue, according to Dean, is the tax rate is formulated using the current tax year’s total assessed valuation. If a taxing entity sets the budget’s mill levy based on a certain number and the valuations drop, the agency will receive less money than needed. Dean wished the bill would allow organizations to set a dollar amount instead of a mill rate that could fluctuate.

Dean acknowledged the intent behind the bill is to increase taxing transparency. Along with a public hearing and publications, if a taxing entity wants to exceed the Revenue Neutral Rate, they must send out postcards that are mailed to each citizen within their voting jurisdiction.

"Legislators wanted tax payers to know exactly how much is being levied," said Dean. "Some individuals felt it would be better if it ended up in your mailbox. Whether or not that becomes more junk mail, I don't know."

Dean told the Barton County Board of Trustees that he recommends the board to announce they will be exceeding the RNR. Exceeding the RNR does not necessarily mean the college will receive more money. The move means the board has more control to set the mill levy where they want and potentially receive the same amount of money that was established the year before.    

Rolling out the Senate Bill 13 requirements for the 2022 fiscal year, no postcards are needed this year. The expense of the postcards will be absorbed by the State of Kansas the following two years and then the taxing entity wishing to raise the RNR will be responsible for the mailing cost in fiscal year 2025.

Listen below to the entire discussion regarding Senate Bill 13 at the June 8, 2021 Barton Community College Board of Trustees study session.