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A flat mill levy isn’t sacred

Shifting costs will add to later burdens

By The Mercury

We appreciate city commissioners’ efforts to prevent the mill levy from rising. We share residents’ disdain for tax increases. But although a flat mill levy is a worthy goal, it’s not sacred. Nor is it commissioners’ job to keep it from rising.

Commissioners’ job involves providing for the city’s immediate and long-term needs, ensuring that money is spent efficiently and that taxes on citizens are no higher than necessary to meet those goals.

Commissioners last year were able to meet the city’s needs without raising the mill levy. A modest rise in assessed valuation, which made a property tax mill more valuable, helped, as it will again this year. But our sense is that the preoccupation of some commissioners with maintaining the mill levy at the same level again this year could be more expensive in the long run.

Perhaps the best example is the commission’s decision to pay for street maintenance – some of it deferred for several years because of its expense – with a sales tax increase instead of through property taxes, the more traditional method. The commission hopes to put that question on the November ballot with multiple options from 0.1 percent to 0.2 percent, with each tenth of a percent generating about $1 million for street work.

A majority of commissioners also seem inclined to shift items traditionally paid for with property taxes to another fund subsidized through voter-approved sales taxes: the economic development fund. Among capital improvement items that could be shifted to the economic development fund are a new pumper truck, laptop computers for fire engines and a software update.

As City Manager Ron Fehr pointed out, this would set a precedent. In our view, it’s not a good precedent. Even though commissioners broadened the purposes of the economic development fund to include infrastructure expenses, shifting capital improvement expenses into the fund to prevent the mill levy from rising is ill -advised.

We’re glad Commissioners Usha Reddi and Karen McCulloh balked at the lengths other commissioners are going to keep the mill levy from rising. Commissioner Reddi said that although a flat mill levy might make commissioners “feel good” this year, “the city won’t be so good in a few years.”

She’s right. Among other things, the growing reliance on the sales tax for city operations normally paid for through property taxes shifts the burden disproportionately onto lower-income residents. Moreover, dumping items into the economic development fund siphon revenue that could actually generate economic development and makes a mockery of the fund. Also, if citizens are asked to pay higher sales taxes, it should be for extra items such as economic development or recreational purposes.

We don’t envy commissioners their dilemma. Governing a city is difficult. Raising taxes is difficult and unpopular. So is cutting spending. But we’d rather commissioners made a difficult decision now than leave future commissioners with an even more difficult dilemma.

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