Commission members blame schools for property tax spike

The Linn County Commission has come under fire for property tax hikes following the publication of a table by a Wichita-based think tank that showed the county has led the state in tax increases. (Journal file photo)

By Charlene Sims, Journal staff

LCJeditor@icloud.com

MOUND CITY – On Monday, March 2, the Linn County Commissioners met with Appraiser Lisa Kellstadt to get more information about valuations after a chart printed by the Kansas Policy Institute came out on social media.

The chart showed the amount of valuation increase for each county in Kansas and Linn County was the highest with 91% increase.

Kellstadt handed out to the commissioners copies of their individual tax statements for 2021 and 2025 so they could see the increase in valuation in their districts. Kellstadt pointed out how those statements showed that Linn County had been growing and valuations had increased.

Kellstadt told the commissioners that since COVID hit that is what most of the state has seen already. She said that COVID was a big mark in the state market value.

Commission Chair Alison Hamilton asked if it was fair to say that other counties like Johnson and Miami were already close to their proper valuations the last five years.

Kellstadt answered that was likely the case.

“So their increase is lower because we were not caught up to where we needed to be according to the property value,” Hamilton said.

Kellstadt answered, “We could have been in the ‘70s or ‘80s in our ratio study,” Kellstadt said. “I haven’t had a chance since the information I got from the Property Valuation Division (PVD) to really go back and research off that. But I know that when Kathy (Bridges), our previous appraiser took over, she went in and had to completely redo all of our tables because another company was doing all of our analytical work.

“She wanted to come in with fresh eyes and look at it. And she started the analytical. We had to really raise our values the first two or two or three years that she came on just due to we were under-appraising. Two years ago the state came in and they reported to us that we had not met compliance. We were appraising at 84%.

“And so last year we brought it up and we were appraising at 94%, and this year I believe it’s coming out in March that PVD said we were in compliance again. So we were in the 10 point 20 point spread where we have to meet their requirements

Johnson said, “Well last year was the first year and this is my fifth year going on my sixth. Last year was the first year we were in compliance that I remember. When the state came down it was always low.”

A document showing counties compliance on the Department of Revenue Property Valuation sight titled “Substantial Compliance Final Summary – 10/2023” shows that Linn County was only out of compliance in 2021 and 2022. This form also shows that being out of compliance is not that common among Kansas counties.

Johnson asked, “And so what you’re saying on this sheet here then is, like, we’ll use Anderson County. They went up 67% in four years. So you’re saying they were closer within range?”

Kellstadt answered, “Possibly, I don’t know what what their statistics are, but all these counties, all the counties from the appraisers’ offices that I have talked to, they have increased in value.”

This chart published by the Kansas Policy Institute shows Linn County as having the largest tax hike over the past five years of any county in the state. It was published on social media over the past two weeks and has resulted in charges that it has been the county commission's fault. (https://kansaspolicy.org)

Kellstadt explained to the commissioners that Linn County has five lake communities and each one of those lots with any kind of building are included in the residential (R) class valuation.

Johnson asked Kellstadt what percent the lake lots had gone up in the last five years.

Kellstadt answered, “Well, just the lake lots at Linn Valley have increased. You know, 10 years ago you could have bought one for probably $500 but you know now we’re seeing upwards of well, I don’t know if I can say, but gradually just $5,000 is what we’re seeing. So that’s a huge increase.”

Hamilton and Johnson were concerned that members of the public were accusing the county of raising taxes and wanted to clear that up.

Johnson blamed it on the school districts raising their mill levies.

“When the county is revenue neutral, that’s only part of all the districts,” Kellstadt said. “So some of the districts I gave you have had larger increases. They haven’t been revenue neutral. They’ve, you know, increased their budgets.”

Hamilton wanted to make sure that the public knew that the school districts are increasing while the commission was keeping the county budget revenue neutral. She pointed out the the county’s Rural Fire budget has been decreasing along with districts like the Mound City Township.

Johnson pointed out, “Like on the first line you’re saying from 2021 to 2025 there’s been a zero percent change on the county.”

Kellstadt agreed, “Yes, you’ve gone revenue neutral, so in other words, whatever valuation has been there you’ve stayed zero.”

Hamilton reiterated, “But when the public is stating that the commissioners are increasing, that’s really not correct. That would be the school boards.”

Kellstadt went over tax statement on Hamilton’s property, which is in the Pleasanton USD 344 school district. Kellstadt pointed out that cemetery districts within the USD 344 school district were up 47%, libraries up 46%, the Rural Fire went down 12%, the bond issue was up 15%, Extension District 16 was up 41% in five years.

“For the public, and you guys correct me if I’m wrong on this,” Hamilton said, “it’s saying we have an increase in Linn County but obviously the valuations and property taxes is increasing. That is increasing, but it’s not from the county.We’re not taking more. Everyone else around us is.”

“So the state of Kansas has taken, just in my district,” Hamilton said, “an extra $155,000, USD 344 has taken an extra $300,000 and an extra $115,000. The cemetery districts have only increased $4,390.The library has increased $52,000 and our rural fire department has decreased $64,000. Bond and interest are up $80,000 and the Extension District. No. 16 has increased $88,914.”

Kellstadt explained, “There’s a lot of things playing into the tax bill, you know, a lot of different entities playing into the tax bill. Our job as appraisers is we’re to set market value, whatever it is. If the market goes up, we go up . If market goes down, we go down. We’re just supposed to be within 10 % of market on either side. And market has increased, and then everything else is handled through budgeting and you know the clerk’s side and how much you guys need to run the government.”

”So when we are talking about Pleasanton taxes and Pleasanton property taxes increasing, that’s probably because our school is taking more. Am I correct in saying that?” asked Hamilton.

Kellstadt said she could not say that for sure.

Hamilton asked if there was a financial consequence to the county financially if the county was not in compliance.

Johnson said, “We were below that multiple times, and I asked the guy here. I said, ‘What happens?’ He said, ‘I’ll just be back to see you next year.’ You know, that’s where you’re at.”

When reappraisal first started, they would hold back money, but they don’t do that anymore, the appraiser said.

Hamilton asked, “If we do not stay in compliance, that is something that could affect your job.”

Kellstadt answered, “It affects my job. Yes, you can get rid of me.”

Hamilton said, “But that would come down from Topeka. Or if you were out of compliance is it up to the commission to say ‘Stay out of compliance?’”

“Get us in compliance or your fired, I guess, I don’t know,” Kellstadt said.

Hamilton told Kellstadt, “I appreciate all the information you gathered after that (Kansas Policy Institute) post went viral for us.”

Kellstadt said, “I don’t know what their purpose is. Bob Kent just told me that they provide the information to this company, or whoever it is, and what they do with it he does not know. He just gives them statistics.”

The Kansas Policy Institute is a conservative think tank based in Wichita with an office in Overland Park. That organization’s staff took statistics from the Kansas Department of Revenue and compiled them into a chart showing the valuation increases by county.

Kellstadt showed a letter from Kent, who is director of the Property Valuation Division at the state Department of Revenue.

That letter said,“The 5-year value change has been summarized on the summary worksheet. We provide a copy to Mr. Trabert (CEO, Kansas Policy Institute) every year. We do not know how he uses the data, except to say he provides information to the public and the legislature from time to time.

A copy of the summary worksheet sent by Kent to Kellstadt, showed that Linn County during the years 2021 to 2025 had an average annual overall valuation increase of 13.265%.   

The letter from Kent to Kellstadt also said that the county’s median ratio or compliance level for 2025 was 92%.

Some of the other factors concerning property taxes include:

• The COVID pandemic affected valuations in rural areas starting in 2020 because people were   purchasing property for prices much higher than the market value, often offering more than the seller’s asking price. One Linn County real estate broker said the price of property in Linn County went up more than 40% in one year. Linn County has more real estate parcels than many rural counties because of the lake community lots.

• The Revenue Neutral Rate (RNR) was established in 2021 by the Kansas Legislature. The legislation adds extra steps for government entities to take if they decide to raise their mill levies. The Linn County Commission has approved budgets that have remained revenue neutral since the legislation was enacted..

• In both 2021 and 2022, Linn County was out of compliance with the state’s valuation process. That was the first time in recent history that the county has been out of compliance. Kathy Bridges was hired as the appraiser in 2021 and she successfully set to work to bring the county back in compliance. In 2023, Linn County was rated compliant by the Property Valuation division.

• While Linn County strained to keep their budget revenue neutral, this sometimes affected the budgets of cities in Linn County. For example, in May 2022, the county stopped giving infrastructure grants from the county’s pipeline windfall fund to cities in the county. That helped the county keep its revenue neutral budget but pushed the cities to increase their tax rate to continue to provide the same services. However, according to information from the county clerk Chasity Ware, mill levies for city budgets have actually decreased because of the higher valuations.

• As Linn County kept their budget revenue neutral, the state and other entities in Linn County (cities, schools, libraries, cemeteries) already had budgets affected by inflation and had to raise their budgets to meet the current and future inflation rates so they could purchase needed items to run their business and retain and hire personnel.

• As equipment prices have soared, the commission has delayed replacing some aging equipment in order to keep expenditures down. Whether or not that strategy will pay off as prices continue to increase remains to be seen.

• Despite the commission’s work to keep the county’s budget within the revenue neutral rate, the county’s portion of distribution of taxes remains high. According to the Department of Revenue, in 2024 the county received 38.5% of the tax distribution. Together the county’s three school districts received 17.8% for their general funds and 27.88% for local option budgets and bonds for a total of 45.68%. Cities received 7.64%, libraries received 3.62%, and each of all of the other districts, including the state, received 1.5% or less.

• State Sen. Caryn Tyson (R-Parker), chair of the Senate’s Assessment and Taxation Committee, was a chief architect of the revenue neutral rate, which got bipartisan support when it was passed. At a legislative coffee in Pleasanton on Saturday, March 7, Tyson praised the commission effort to remain revenue neutral,. However, she cautioned that eventually with rising wages and prices the Linn County Commission would be forced to abandon the quest to keep its revenue neutral status.