Amid tax revenue collections that are not keeping pace with inflation, Johnson County commissioners have begun examining whether special sales taxes may be a way to ensure the county’s fiscal health in future years.
The idea was broached at a budget retreat Friday afternoon between the commission, the county manager’s office and various department heads.
Two sales tax possibilities were mentioned, though any such measure wouldn’t take effect until 2027 at the earliest and would have to be approved by voters first.
The discussion of sales tax measures remains in the earliest stages as county officials start their annual budgeting process for next year and gauge the fiscal outlook beyond that.
Two sales tax possibilities
The first possible sales tax mentioned at last week’s budget retreat would be a renewal of the current Public Safety Sales Tax 3, which paid for the new courthouse and will expire in March 2027.
Renewing it for another 10 years would reap an estimated $35 million a year, with proceeds potentially dedicated to law enforcement, judicial services and emergency response.
Alternatively, the county could establish a new “health and safety” sales tax dedicated to the county ambulance service, mental health, aging and human services, paratransit and public health.
That tax could be levied at levels between 0.25% and 1%, with the county retaining all of the revenue. (By comparison, the county gets to use 63% of the current public safety sales tax and shares the rest with other local taxing bodies.)
The county budget office estimates revenue from a “health and safety” sales tax could reap anywhere from $53 million to $215 million a year.
Sales taxes would have to be approved by voters
In either case, the sales taxes would have to go before voters, and that’s why county officials are starting to look at possibilities now even though no new tax would take effect for two years.
The Kansas Legislature is considering a requirement setting the first Tuesday in March as the date for all special elections, like school bond issues and municipal and county tax measures.
Getting the ballot language and public outreach ready in time before the safety sales tax expires means county officials would have to begin working on it sooner.
Commissioners didn’t discuss the sales taxes in any depth at Friday’s budget retreat, which is meant as an early, broad outlook at the issues the county will likely have to deal with for the 2026 fiscal year and the five-year fiscal outlook.
However, the sales tax options may get more study as the budget season progresses.
Inflation, aging population pose challenge
Currently, $1.37 billion of the county’s total $1.8 billion budget for 2025 is for operating expenses, with the other roughly $460 million accounted for by reserves.
Nearly half of the operating budget — roughly $535 million — is paid for in tax revenue, including property and sales taxes. (Other major sources of revenue beyond taxes include wastewater user fees, investment income, building fees, and state and federal grants.)
Of the tax-supported revenue, $271 million comes from the county property taxing district (not including levies assessed by the county parks and library systems).
Robin Symes, the county buget director, told commissioners that some challenges the county faces this year include inflation, slowing sales tax growth and state laws that have recently reduced counties’ personal property tax revenue collected on things like cars.
Inflationary pressure has hit the public works department particularly heavily. The price of metal culverts, for instance, increased 80% from 2020 to 2024.
The jail also saw the cost of food services increase by 54% since 2021.
At the same time, the county’s aging population has increased the need for meal services, and Med-Act ambulance call volumes have steadily gone up about 3% per year, according to the county’s figures.
Most commissioners want to keep mill levy steady
Much of Friday’s discussion went toward the mill levy, or property tax rate, and the outlook for making cuts in programs and services.
The county has reduced its property tax rate in six of the past seven years, though many taxpayers have still seen their annual tax bills (from all local taxing jurisdictions) increase due to rising appraisals.
Those high home values have brought in more revenue for the county in recent years, enabling decreases in the tax rate. But on Friday, a few commissioners said they were more likely to keep the mill levy the same next year, rather than risk reducing it at a time when there’s uncertainty over federal grants that fund some services.
“The challenge that we find ourselves in is real particularly because of the lack of partnership at the state level and the potential lack of partnership with the federal government,” said county chair Mike Kelly. “We don’t know what is going to happen at the federal level.”
Kelly said he’d prefer to maintain services while the funding situation in Washington D.C. evolves.
“I feel like that makes sense especially when even at this flat level we’re still going to have to be making very tough decisions on how we provide the same level of services,” he said.
Commissioners Janeé Hanzlick and Jeff Meyers said they are comfortable with keeping a flat mill levy.
One commissioner pushes for mill reduction, budget cuts
However, Commissioner Michael Ashcraft said he’d like to take a look at other options, such as a quarter-mill levy reduction, a revenue-neutral reduction or decreases of 1-5% in department budgets.
Those are hard decisions, “we’re going to have to make eventually and the sooner we make it the more flexibility we have,” he said.
Some commissioners noted that elderly residents who depend on meal delivery, transportation and other county services have already begun to contact them with worries about budget cuts.
“They’re worried about losing their meals. I don’t know how you can tell them to cut more services,” said Commissioner Shirley Allenbrand.
Commissioner Julie Brewer said, “Here’s our reality: When we talk about our fastest-growing demographic being 65 and older and that we were 65% of the growth over a five-year period of the state, there’s not a chance in heck and high water we can continue to be the fiscal and economic engine for the state of Kansas if we are not bringing workers into jobs people are leaving them.”
Without growth, “we will have to tell people, ‘Too bad, too sad, there’s no services for you as you age.’ And that’s not a decision I’m willing to make,” she added.
There was no discussion of the potential expenses of the World Cup international soccer tournament.
Kelly said afterward that he expects that to become clearer as partnerships and mutual aid develop and department heads present their budget needs.
The budget retreat was only the first meeting in the budget process, which continues with study sessions and talks with department heads before it is approved in August.
