“No one from the business community has stood in front of a board and said, ‘Enough is enough!’”
That was the sentiment expressed to the Riley County Commission Monday by business owner Chris Darrah, and his subject was property tax increases. Darrah, who owns a dozen Dara’s Fast Lane convenience stores in the area, said he and other business owners are on what he described as “a fact-finding mission” to figure out why their property taxes are so high. There’s a second part of their agenda, he said: how to either get those taxes reduced or get a more predictable pattern of increases that businesses can deal with ahead of time.
Commissioners are expected to begin preparing next year’s county budget around June 1.
Unlike residential properties, which are assessed for tax purposes at 11.5 percent of their market value, commercial properties by state law are assessed at 25 percent of market value.
“We are concerned about where does this go and where does it end,” Darrah said.
About one-quarter of the property tax bill paid by any individual or business in Riley County, Manhattan and USD 383 is levied by the county. About one-third is levied by the city and most of the remainder is levied by the school district. For individuals in other counties, cities or school districts, that percentage may vary.
Darrah told commissioners that many business owners are beginning to consider closing up due to high property taxes.
“We are becoming our own California,” Darrah said. “People can’t afford it.”
Darrah said the taxes on his businesses have increased up to 38 percent over the past three years, from a total of $105,000 for his dozen establishments to $136,555 since 2010. He also questioned why his recent amounts and percentages have varied so greatly, with the tax on one location declining while a half dozen rose by double-digit amounts.
“We are raising prices to cover our costs,” Darrah said. “It’s going to hurt the middle class the most.”
County clerk Rich Vargo suggested that state cuts could be to blame for Darrah’s experience.
“We get things dumped on us (by the state) all the time,” Vargo said. Commissioner Bob Boyd hinted at even more impacts coming with next year being the first year some businesses won’t have to pay income taxes.
“The income tax (reduction) will fall back onto the county,” Boyd said, referring to local tax increases he expects will be necessary in order to offset the loss of that state revenue.