For the first time in four years, the Shawnee City Council has approved a city budget that includes a flat mill levy rate.
On Aug. 26, the Shawnee City Council voted 6-2 to pass the 2025 city budget. Councilmembers Tony Gillette and Mike Kemmling were in dissent.
Breaking a three-year streak, the adopted budget did not include a decrease to the mill levy rate. Instead, it has a flat mill levy of 23.048 that is expected to generate property taxes of about $32.76 million.
It will still exceed the revenue neutral property tax rate for its 2025 budget set by Johnson County at 21.609 mills.
What do “mills” actually mean?
• One mill is equivalent to $1 for every $1,000 of assessed property value.
• Assessed property values are 11.5% of appraised, or market, values for residential properties. (So, a home appraised at $300,000 has an assessed value of $34,500.)
• So, divide your home’s assessed value by $1,000 and multiply that by a taxing jurisdiction’s mill rate to figure out how much in annual property taxes you will owe for that jurisdiction’s share of your annual tax bill.
Council chose a flat mill levy
The city proposed a flat mill levy rate this year for a number of reasons.
Home values in Johnson County continue to grow, up 10% from 2023, with the median listing price of $409,702, according to Rocket Mortgage.
In addition, overall property valuation growth in Shawnee is expected to increase at about 6.6% next year with the average increase for residential properties expected to rise 6.3%.
On the other hand, sales tax revenue is expected to cool substantially. Shawnee’s 2025 forecast shows an increase of about 2%, compared to 9.3% in 2022 and 9.5% in 2024, according to city documents.
What is the revenue neutral rate?
The revenue neutral rate is the tax rate that generates the same amount of revenue as the previous budget year using the current-year assessed valuation.
A Kansas law passed in 2021 requires taxing jurisdictions like Shawnee to host public hearings if they plan to exceed their revenue neutral rate by bringing in more in tax revenue than the previous year.
Exceeding the revenue neutral rate allows the city to take in more revenue than it did the previous year.
The general fund is running on a deficit
The 2025 budget projects about $73.841 million in general revenues and $78.977 million in general fund expenditures.
The general fund budget will be operating with a $5.137 million deficit. $3 million of that will be covered by a one-time allocation from the city’s reserves.
Before tapping more into the city’s reserves, Kramer said city staff hopes to make the rest of the deficit up in other ways.
“We hope that sales tax revenue bounces back,” he said during the meeting. “We know that there will be some vacancies through the year, so we hope that we end the year without deficit spending. But we are in a reserved position to do that for this year.”
Budget goes mostly to city staff
One new program included in the budget is a 10-week summer camp for kids, which is expected to cost about $104,250 and bring in $126,000.
About 78% of the general fund expenditures will go toward the city staff’s salary and benefits, as well as public safety personnel, which is expected to increase by 9% annually, in part because of increases in state pension requirements, according to city documents
While city staff looked at cuts it could make to the remaining 18% of its budget, which is contractual services, they found problems making slashes there.
“Unfortunately, some of those items, like utilities, insurance, software licensing fees are also increasing,” said City Manager Paul Kramer.
Some councilmembers wanted a mill levy decrease
During the meeting, Gillette motioned for a 0.5% decrease in the mill levy and a freeze on funding for Old Shawnee Days.
“We’ve responsibly lowered our mill levy rate, kept expenses in check, and this council and this staff has done a fantastic job doing that,” he said. “I think it’s the right thing to do for our citizens. They’re hurting.”
He was joined by Councilmember Mike Kemmling and Jacklynn Walters.
“(It would) make a big difference for those in our community,” Walters said.
Councilmember Jeanie Murphy expressed a want for a decrease but thought now was not the right time.
“We also have an election coming up that we don’t know how that may affect everything financially for the country, and we also have changes coming from the Federal Reserve,” she said. “So I don’t think this is a good time to lower the mill.”
Gillette’s motion failed in a 4-5 vote with Mayor Mickey Sandifer breaking the tie. Councilmembers Murphy, Sierra Whitted, Kurt Knappen and Laurel Burchfield were in dissent.
Go deeper: Shawnee proposes flat property tax rate next year, but some on city council press for another cut
