HUTCHINSON — Most county officials believe it's unlikely that the state will honor its 2006 promise to compensate Kansas counties for funds they lost when lawmakers enacted a tax break to lure businesses to the state, a representative for a county lobbying group said.
Under the law, commercial and industrial equipment and machinery, telecommunications and railroad machinery and equipment purchased, leased or brought into Kansas after June 30, 2006, are exempt from property taxes. Older equipment is still taxed.
To compensate for the law's impact on remaining property taxpayers, the Legislature promised to make "slider" payments, based on a formula applied to each county. In 2008, the state made nearly $26 million in slider payments.
But in response to a worsening budget, the 2009 Legislature adjusted the payment schedule and lowered the percentage. The counties didn't get their second-half slider payment in June 2009 or received no payments this year. The slider payments are scheduled to resume in the 2012 fiscal year.
Reno County Treasurer Clark Miller said most county officials don't expect to receive further payments.
Melissa Wangemann, the legislative services director and attorney for the Kansas Association of Counties, agreed with Miller, noting that the state faces a $500 million budget shortfall this fiscal year.
Republican Speaker of the House Mike O'Neal said the Legislature should either commit to the slider payments or get them off the books because local officials can't count on the money being there.
Kansas Commerce Secretary Bill Thornton said that having no tax on new equipment and machinery is one of the most important incentives the state offers to lure businesses to Kansas.
Gary Baker, a Stevens County commissioner, said there's "no question that the tax base has shrunk" and the machinery and equipment tax base contributed to that loss. He said the state has kept more than $80,000 in slider payments intended for Stevens County.