A “clerical error” means Merriam residents will save more than expected on their 2024 property taxes — while the city figures out how to deal with a more than $1 million hit to its municipal revenues.
Earlier this month, the city announced that a mistake made in forms submitted annually to the county and state calculated the city’s 2024 property tax rate incorrectly, meaning an even lower property tax rate than originally anticipated.
The city council had already voted earlier this year to lower the city’s property tax rate in 2024 by 0.25 mills to 27.415 mills, but the error means the effective rate next year will be 22.929 mills.
The new mill rate cut of 4.48 mills is nearly 18 times larger than what the city had planned for next year.
On average, Merriam homeowners are expected to pay nearly $150 less in local property taxes next year due to the mistake.
“It’s a good oops for you in 2024,” the city announced on its Facebook page.
According to a city press release, the error will take a toll on city revenues with fewer property tax dollars going to the city in 2024, with total losses from the miscalculation expected to top $1 million.
For context, the city is expecting to take in nearly $37 million in revenue next year, of which property taxes make up about 14%.
The city’s ending fund reserve balance in 2024 is expected to be roughly $35 million.
How did this happen?
- Like all cities, Merriam submits its approved budget to the county and to the state.
- Normally, the city calculates special financing districts — such as the tax increment financing district that a portion of the Interstate 35 corridor is in — separately from other revenue sources.
- Merriam used a new form to submit the 2024 budget that is specific to special financing districts.
- This new form called for all revenues to be combined, but the special financing districts revenues were calculated separately.
- “Therefore, the total property tax revenue that was calculated was incorrect,” the city’s press release reads. “We were focused on making sure the decreased mill levy rate number was correct on this form, and we missed other needed updates.”
Average Merriam homeowner will play nearly $150 less
For 2024, Merriam’s property tax rate is now set to be 22.929 mills.
This number, also known as the mill levy rate, dictates how much residents will pay to the city based on their home’s assessed value.
The average home value in Merriam in 2023 is $281,832. Under the originally approved 27.415 mill levy rate, the Merriam homeowner would have paid $888 to the city in 2024.
Under the mill levy rate of 22.929, the average Merriam homeowner is expected to pay $743 to the city in 2024.
The following steps can help homeowners calculate their actual tax bill based on the property tax rate change:
- Multiply your home value by the residential assessment rate in Johnson County of .115.
- Take that number, divide it by 1,000 and multiply the result by the city’s 22.929 property tax rate.
- A calculator tool is also available through the city of Merriam online here.
Remember: Residents pay taxes to more than just the city with their annual tax bill. Merriam residents, like all Johnson Countians, pay taxes to other jurisdictions including school districts and the county itself. The error impacts just the city’s portion of local property owners’ taxes.
Merriam residents should expect a mill rate increase in 2025
- Merriam believes it “can maintain service levels for the year” even with the more than $1 million in expected revenue loss due to the filing mistake, according to the city website.
- That is because of 2023 cost savings such as deferred purchases “and adequate reserves,” according to the city website.
- Still, the city said both online and via postcards sent to residents that it anticipates the need for a mill rate increase in 2025.
- “While this is a good oops for you, it isn’t sustainable if we are to continue to maintain the level of services our residents expect and deserve,” the city website reads. “In 2025, we anticipate needing some sort of mill rate increase. But, for now, you get to keep more money in your pocket.”
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