by Jennifer Williams

During the September 11th budget hearing for the Spring Hill USD230 school district, there was only a handful of people in the room and only one public speaker.

To hear internet critics cry foul all year regarding their increased appraisals and the fear of rising property taxes causing them to lose their homes or be forced out of the district, one would think the room would have been packed.

It seems that’s the problem with education.

Local county and city property tax hearings have seen many public speakers expressing concerns about the cost of inflation and the effects the increase in taxes will have on their budgets and their ability to stay living in their homes.

Local county commissioners and city council members have even been threatened with being voted out during their next election cycle.

One commonality amongst all of those municipalities was the elected officials telling the citizens that if they wanted to see a difference in their property tax bills, then they needed to be looking at the school mill levies and attending those hearings to voice their concerns since the school district mill levy is the biggest property tax item the residents pay.

But when it comes to education, it seems that the public is less vocal. Why is that?

Perhaps many in the community are fine with the cost of the taxes because they believe a quality education is important, and they’re willing to sacrifice whatever it takes to continue funding whatever the administration says is necessary.

When there’s a large enough group in favor of the messaging, it could be that any dissenter is shamed for being “against education” if they dispute increases in school budgets since “it’s for the children.”

This leaves a sense of alienation in the community, and just as their kids are forced to face peer pressure in the schools, it seems the parents may have succumbed to peer pressure in their community.

This social pressure was evident many years ago when Spring Hill was voting to approve the $74 million bond for new schools. Residents talked about their willingness to sacrifice “the cost of a cup of coffee” to have their children in good schools. Some teachers took to Facebook groups and told anyone who did not approve of the bond that they were against the children. One Wolf Creek Elementary teacher even told a retired gentleman who was concerned about his fixed income not being high enough to cover his increased tax expenses, that she noticed he had a new truck in his profile picture and that he could sell that truck and have enough money to help the children.

So perhaps one explanation for the lack of questioning is that to fit into a community, one must keep their mouth closed when it comes to education dollars and how the schools are spending the money or risk being chastised by others who are willing to give up “the cost of a cup of coffee” for the next increase.

At over a 20% budget increase for this year, that’s a lot of coffee.

Perhaps the people heard the mill levy was decreasing again and trusted that meant taxes were also decreasing. The reports presented claimed the district reduced the mill levy in 16 out of the last 17 years.

Here is a chart from their presentation that shows a consistent annual mill levy with only a slight fluctuation.

But what does a consistent mill levy actually cost when faced with increasing property values?

As with many budgets, the term “mill levy” reduction is used in a manner that makes the taxpayers and the voting boards get the impression that taxes are also being reduced.

This is a false representation of the numbers since a mill is merely a factor of an equation. The actual tax amount fluctuates annually, depending on assessed values, rendering a generic mill number useless in any sort of comparison of tax dollar increases or decreases. The mill alone cannot paint a full picture.

The above chart shows the astronomical growth in the assessed valuation of properties within the district over the past several decades. Looking at the past 10 years, it is evident how total assessed values have drastically increased. This would be expected in a district like Spring Hill, which is not only one of the fastest growing in the area but also in the entire State of Kansas. Not only are existing home values increasing but new homes are being built, adding to the total assessed values for the district’s taxing base.

As the total assessed values in the district increase, the value of 1 mill increases, (.001 multiplied by a larger assessed number equals a larger tax number), so a district needs less of those mills to meet the same dollar amount collected as the year before.

Therefore, it is mathematically clear that a steady mill levy multiplied by assessed values that have almost quadrupled in the past 10 years will result in substantially higher tax dollars collected from the taxpayers, specifically those who saw the highest appraisal increases.

So it’s easy to see how the old “mill levy” comparison game is only a talking point that ignores the actual math behind the numbers.

The only number that can really be used as a comparison is the actual tax dollars collected.

This slide from the USD230 presentation shows how the calculation works.

When comparing the 2022 tax due to the 2023 tax due for this property owner, that’s an increased tax obligation of $332.75 or a 15.3% increase in taxes. How can that be if they lowered the mill levy?

As shown in the district’s example, it’s from the 15.01% property value increase. Let’s see the math.

If the taxpayer’s home value increased 15.01% from 2022 to 2023, their 2022 market value would have only been $292,830. Had their 2023 home value stayed consistent with the 2022 value, and the only factor that changed from 2022 to 2023 was the mill levy, the 2023 tax due with the “rolled back” mill levy would be $2,170.92.

This would have actually been a “rollback” for the taxpayer, by saving them approximately $7 from the 2022 tax due the year before (2022 tax shown in parenthesis in the district’s example above).

Since the value of the home increased by 15.01%, the amount of the taxes must also increase by a similar amount since the mill levy did not decrease enough to offset the increased home appraisal. (67.406 mill in 2022 vs 67.198 mill in 2023)

With a consistent or barely adjusted mill levy in an inflationary housing market, the district gains revenue approximately equal to the amount of the inflationary adjustments on the home’s value.

In the example above, the district referenced a 15.01% increase in value. Had the property owner seen a 23% increase in value, they would see approximately a 23% increase in taxes. The same is true for those who sadly saw increases in property valuations as much as 43% or more; their USD230 tax due increased by approximately the same amount as the appraisal increase, penalizing some disproportionately to others.

Below are actual tax statements showing a 10-year comparison from one property since 2014 and how the “rolled back” mill levy over the past decade has effectively tripled the taxes charged by USD230 during that time frame, from $995.73 in 2014 to $2,951.65 for 2023 – due to rising appraisal values.

That’s a 196.43% increase in 10 years – or almost 3 times the amount – just for the school district.

Notice the 2023 tax due from the school district alone – $2,951.65 – is 60% higher than the entire tax bill including county and state taxes of $1,837.75 just 10 years before in 2014. This is unsustainable!

(*Note: This home has not been sold in that timeframe and all property value increases are directly related to the county’s opinion of value, with no corresponding realization of those gains via the sale of the home.)

This taxpayer will owe an additional $638.85 in 2023 or a 27.6% tax increase from the 2022 tax due – attributed to the increase in the county’s valuation of the property and USD230 not remaining revenue neutral.

According to Johnson County, about 90% of the property appraisals increased this year, for an average increase of 12%, not including new construction. Miami County’s average was 17%, with many homes in the USD230 school district closer to 25%.

Last year, the Johnson County number was approximately 97.5% increased for an average increase of 11%.

This increase in annual values would indicate that if a school board did not lower their mill levy, then they would be getting an annual raise approximately equal to the increase in property values.

Imagine if the appraised values had not increased.

What if there were no higher property values to tax at the steady, or slightly rolled-back, mill rate?

Would the taxing jurisdiction raise their mill levy by the over 20% increase they are requesting with the current budget to arrive at the same total budget as they did by capitalizing on the value increases?

Would they have the audacity to request a mill over 80 mills if they did not have the appraised values to cushion the blow or hide the increase?

It would certainly ruin the narrative that they’ve maintained a consistent mill rate.

Perhaps they’re maintaining a consistent mill rate and creating a budget to match what they can collect with the increased values and steady mill rate because they know, as Commissioner Charlotte O’Hara suggested to the Johnson County budget department, that they can claim a slight rollback to avoid resistance, while still raising tax dollars by taking in more dollars based on the large value increases.

These tax increases are extremely irresponsible at a time when taxpayers are getting hit from all angles – fuel, food, utilities, and other taxing jurisdictions. An increased budget of over 20% puts undue financial strain on homes. This was addressed to the school board during their hearing.

“For the children” is more than just the school district being wise in their own eyes and arrogantly placing themselves above the other needs in a community. Children need happy homes. They need parents who are not fighting about finances or being away from the home for longer hours to make up for their household deficit from the inflation impacts.

Raising taxes to this magnitude steals a person’s ability to donate that time or money to other important charities, churches, or community projects. To some, it steals their ability to meet the new escrow amount and they will be forced to sell or face foreclosure.

The taxes don’t just affect homes. They are charged against vehicle renewals also. As the price of automobiles is also impacted by inflation, the cost of paying taxes (sales and property) on those cars is also increasing. The homeowners are taking a beating on all levels.

Just because they can raise taxes doesn’t mean they should.

The budget increase looked justified on paper. The expenses by category showed what was deemed necessary to operate the district without taking cash reserves too low, and the resulting mill calculation showed that it met those needs.

There wasn’t a detailed dive into those categories nor talks of anywhere the budget could be cut, so it was difficult to see if the requested budget was justified on a micro level.

The presenter, Director of Business & Finance Doug Schwinn, discussed lost revenue from State calculations and procedures and how he did his best to be fiscally responsible, but he stated they can’t be expected to live with the same amount of revenue as the year before.

Board member, Nicole Melius, commented that she too is a numbers person. She stated she appreciated the work done on the budget and that Doug does a great job, but she stated that she still has lots of questions.

“I still have a lot of questions. I struggle a little bit with some of this, the amount of dollars and just knowing where we are financially. I struggle that we keep hearing that it’s really hard to live off the same amount of dollars that we did last year because I feel like a lot of our community is living off the same dollars that they made last year. At some point we have to really dive in and tighten our belts. I know Doug does a really great job of that, but I still have lots of questions for me so that I can speak to it and feel confident that I’ve done all of my due diligence.”

The budget passed with 5 in favor with Mrs. Melius abstaining. Ali Seeling was not present for the vote.