To the Editor:
Thank you for enlightening your readers on the bill to eliminate the hidden tax paid only by people who have to take out a mortgage. This is a tax that needs to be abolished.
I would agree that this tax is not a “deal breaker” on pur-chasing a house, as an individual could not challenge this tax alone. However, that does not make it right. Imagine if in buying a car, a $50 tax would be paid to the county if a loan was made to purchase the car. That would never see the light of day because of the outrage.
Rural community banks support the elimination of this unfair tax because certain other financial lenders do not have to impose this tax. This puts the community bank at a distinct disadvantage even if the loan offers were identical to the borrower. It is a real “deal breaker” to the community bank because this particular borrow-er can avoid the tax while other buyers cannot avoid the tax.
Many counties will see no effect in tax revenue, thanks to the proposal to phase in elimination of the mortgage tax. An evenly applied increase in per-page filing fees also will lessen the blow to county coffers. This will allow counties to prepare their budgets accord-ingly. I would ask this paper to go back to the county officials and have them give one good reason why this tax applies only to people who have to take out a mortgage. Why allow cash pur-chases to be exempt from this tax?
I find it interesting that Riley County says this tax will cost Riley County $1 million in rev-enue a year. In 2013, there was only $984,381 in mortgage regis-tration tax collected in the county, and the bill proposes to make up $528,216 from addi-tional fee income to all real estate filings. The shortfall is a manageable figure in context with an $80 million budget.
Also interesting is that Riley County increased land values by 10.8 percent in 2013 and 14.5 percent in 2014. Surely the home and business values also in-creased. Did the county reduce its mill levy to allow for this or was there a windfall to the county? This is a question that deserves to be answered.
In conclusion, the mortgage registration tax is an unfair tax and needs to be repealed.