THE PREDICTION
THE PREDICTED
Posted on Tue, Jul. 12, 2011 10:15 PM
Property tax hike advances in Overland Park
By BRAD COOPER
The Kansas City Star
The City Council can still reduce the size of the tax increase between now and Aug. 15. But the council moved the budget forward on a unanimous vote Monday night without much discussion about the size of the tax increase.
A 4.1-mill tax increase would generate an extra $10 million a year for the city. It would cost the owner of a $200,000 home $94 more a year in property taxes. It was the higher of two tax options considered by the city. The other called for a 3.6 mill tax increase.
City administrators said the tax increase is needed to put more money into preserving aging city streets, hiring more police officers and replenishing the city’s rainy-day fund.
Without the tax increase, Overland Park would have to lay off 25 to 30 employees and slash spending on street maintenance to about $2 million a year from between $7 million and $8 million, City Manager Bill Ebel told the council.
Overland Park would also have to eliminate its neighborhood conservation program, which was created in 1991 to help sustain older neighborhoods without homes associations, Ebel said.
Even with the tax increase, the city is looking to close Roe Pool in 2012, charge admission to its arboretum and move to a less popular type of maintenance material called chip seal on streets that are more than 30 years old.
The city also plans to take $750,000 set aside for economic development incentives and put it back into the general fund. The account will be left with about $100,000.
Ebel recommended the tax increases to fix an imbalance between revenues and expenses that was brought about by the recession and refunds of state use taxes.
Overland Park has been spending down its reserves in recent years because it was hit with a series of use-tax refunds approved by the state.
Since the early part of the decade, the state has charged a use tax — essentially a sales tax — on out-of-area purchases and sent that money to cities.
However, in the last several years companies have reported they’ve been overcharged and have won refunds, which have hit the city’s reserves. Most of the overcharging comes when a company self reports its purchases and later revises the figures with the state, leading to the refunds, state officials said.
The state has granted $60 million in use tax refunds statewide from 2007 to 2010.
Overland Park will have spent its reserves down to $18 million or $19 million by the end this year. At the end of 2007, the city had an ending cash balance of about $63.9 million.
To reach Brad Cooper, call 816-234-7724 or send e-mail to bcooper@kcstar.com.
Posted on Tue, Jul. 12, 2011 10:15 PM
Read more: http://www.kansascity.com/2011/07/12/3009739/property-tax-hike-advances-in.html#ixzz1S2i1iTZ3
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