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In 2019, the state legislature redefined the term ‘tax increase’ to mean any increase in tax revenue over the previous year’s adopted budget. That may seem obvious, but in the elected official’s world, the term ‘tax increase’ is commonly considered to be the mill levy rate, not the tax revenue.
On the surface, this revolutionary redefinition idea forces elected officials to be more honest in how we discuss taxes. Before 2019, elected officials would proudly claim that they never voted to raise taxes. We all know the tax dollars typically increase each year because the basis for property tax burden is tied to ever-increasing housing values. A static mill levy rate multiplied by a higher assessed value delivers more tax dollars to the government.
Wichita’s leaders claim they have not raised taxes in more than 25 years, even though their property tax revenue increased by more than 177% in that same time frame. It may be technically true that the council never voted for a tax rate increase because that transparency vote was not required until after 2013. Nevertheless, Wichita’s mill levy rate increased nearly 2 mills in the last 12 years, while Sedgwick County’s tax rate has dropped 2 mills in the last 14 years. I am not picking on Wichita, but I just offer this information as an example of how difficult it is to define terms and get true tax accountability.
The RNR law may be well intentioned, but it will not really freeze property tax revenue to some historic arbitrary level for very long. Of the 13 Kansas counties that were able to stay under the Revenue Neutral Rate in 2023, their average mill levy was 73.1 mills. For reference, Sedgwick County’s mill levy rate has been flat since 2010, targeted at 29.359 mills.
For a municipality to not exceed the RNR, either it's been overtaxing and is carrying a large surplus, or the municipality has excessive waste and inefficiencies that can be trimmed or services that must be reduced or eliminated. All those options have natural limits. When inflation is about 10%, as we have seen this last year, the only other option is to exceed the RNR.
If a municipality is over-taxing, ignores inefficiencies or allows wasteful spending, then this RNR challenge is purposeful. But for lean, effective and focused municipalities, the RNR law is an ineffective guardrail, misguided and political.
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