Wichita’s budget exceeds state-imposed property tax lid

Wichita’s budget will exceed a state-imposed property tax lid by $900,000 in 2017, according to the annual spending plan released late Friday.

This year, the City Council can exceed the spending cap on its own authority by voting to do so and publishing a notice in The Wichita Eagle.

But if the city wants to exceed the cap for its 2018 budget next year, it will have to put that to a public vote.

“We are just coming out of the recession and have this artificial impediment put in our way,” said City Manager Robert Layton.

The tax lid originally passed the Legislature and was signed into law by Gov. Sam Brownback in 2015. This year, the state accelerated the implementation date by a year.

The idea behind the tax lid is to limit the growth of city and county governments by prohibiting spending increases above a state-mandated inflation rate. Any income above that would have to be returned through cuts in the property tax rate.

Starting with next year’s budget, local governments will have to hold and win a public election if they want to keep any revenue above the tax lid.

Wichita’s budget proposes holding the tax rate steady at $32.686 for each $1,000 of assessed property valuation. However, the city expects to get additional money because of increased property values in the community.

This year’s increase in the state-calculated inflation rate is one-eighth of 1 percent. The city budget is proposing a 2.5 percent spending increase over last year.

Meeting the tax lid for the upcoming year would require cutting $902,102 from the proposed budget.

Public safety services – in Wichita’s case, the police, fire and municipal court departments – are exempt from the tax lid, so the new law won’t affect plans to expand policing in the city.

But meeting the lid would mean cuts in the city’s transit system, street maintenance, parks and libraries, Layton said.

The city hasn’t yet calculated how much it would have to cut to avoid holding an election on the 2018 budget, because key variables are unknown, including next year’s property valuations and the state inflation rate.

The inflation rate is averaged over five years, so it “may be more robust” than the tiny 2017 increase. But “it’s still going to be pretty limiting,” Layton said.

The budget, which forecasts $231.1 million in general fund spending, will be officially presented to the City Council at its meeting beginning at 9 a.m. on Tuesday at City Hall, 455 N. Main.

Residents wanting to address the council on the budget can do that on Tuesday or at public hearings on Aug. 2 and Aug. 9. Adoption of the budget is scheduled at the end of the Aug. 9 hearing.

This story was originally published July 10, 2016 at 3:23 PM with the headline "Wichita’s budget exceeds state-imposed property tax lid."