Once again, the state is on track to deliver another blow to local governments.
The Kansas Senate’s recent discussion and approval of Senate Bill 298, to remove the mortgage-registration fee, stands to reduce revenues for county governments across the state by at least $19 million. Through their proposed “phaseout,” Sedgwick County loses $800,000 in 2015 and $3.4 million by 2018. With these reductions, Sedgwick County will either have to further reduce services in our community or increase property taxes – neither of which feels good to anyone.
The discussion on the mortgage-registration fee has gotten cloudy and off the facts. The stories have changed, and the facts are stretched thin.
There are those who claim we are “double-taxing” people who can’t afford a mortgage. In reality, the mortgage-registration fee is supposed to be paid by the lender, not the individual. And we are protecting the lenders (the bankers) that need an accurately filed mortgage (in addition to a property deed) in the event of a foreclosure. Last year, Sedgwick County had to deal with 1,800 foreclosures in our community. The assets from those foreclosure sales went directly back to the lenders (bankers).
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Additionally, those who stand to benefit the most from the elimination of the fee are those who have the higher mortgages, not the low-end.
Unfortunately, the Senate didn’t take away any of its mandated services on counties when it voted to take our revenues. Sedgwick County spends $150 million per year to provide services mandated by the state, including property appraisal, tax administration, community health and public safety through the Sheriff’s Office, emergency management, district attorney and district court. The state provides only about 15 percent of the funding needed to pay for these state-mandated programs.
Further, state funding for the services has been reduced $5 million since 2009. In addition, during the same period, Sedgwick County lost nearly $11 million a year because of the state’s actions to eliminate demand transfers and property taxes on machinery and equipment. The total estimated loss in revenue from state reductions since 2009 has been $59 million. This bill likely would result in an additional $8.4 million impact from 2015 through 2019, bringing our state cuts up to nearly $68 million.
At the same time, Sedgwick County has cut a total of $20.4 million from tax-supported funds from the 2011 through 2013 budgets. We reduced or didn’t fund 223 positions in that time. We spent less in property tax-supported funds in 2013 than in 2009. Yet we are still supposed to be good partners with the state, providing its mandated services and allowing it to take away our local control.
It is a sad day in government for the people of Kansas when Sen. Jeff Melcher, R-Leawood, bad-mouths local governments, comparing this fee to pickpocketing and calling it “another hidden way for them to get into taxpayers’ pockets without them even knowing it.” Our Sedgwick County employees, and local government employees all across the state, work hard to deliver services that our citizens need and rely on.
When legislators lose sight of all of the people they serve, and take away local control from cities and counties, they have become like the “feds” they so despise.