Olathe adopted a larger budget for next year and will be keeping the property rate tax flat. Even so, city officials are slowing spending now in order to avoid future financial problems.
The Olathe City Council voted 5-1 on Sept. 15 to approve the total 2027 budget — about $657.6 million in total expenditures.
Councilmember Robyn Essex cast the lone dissenting vote.
In a release, the city said next year’s budget “reflects a commitment to fiscal stewardship, balancing the needs for today, honoring our responsibilities to the future and providing strategic support for long-term planning.
No increase in property tax rate
Olathe’s mill levy — or property tax rate — will stay the same at 23.3 mills.
Homeowners could still see higher property tax bills if their property value increases. The city is exceeding its revenue-neutral rate, meaning it will collect more in property taxes in 2027 than it did this year.
Olathe receives about 20% of property taxes. The Olathe School District receives about 54% and the rest is divided between the state, county and Johnson County Community College.
The city is anticipating collecting $64.4 million in property tax revenue for the General Fund. Sales tax revenue is expected to decline slightly from a projected $79.3 million this year to about $78.2 million next year.
The average home value in Olathe is $457,425, up nearly $20,000 from 2025, according to the Johnson County Appraiser’s Office.
To calculate what you will owe in property taxes by multiplying the value of your home by .115 (the residential assessment rate in Kansas). Divide that number by 1,000 and multiply it by the mill levy rate of 23.3 mills.
The average homeowner in Olathe will owe $1,225.67 to the city.
Essex, who cast the sole vote against the budget, said she believes the city has made responsible speeding reductions but continues to hear concerns from residents about rising property tax bills.
“We have constituents who are seriously concerned about the consistently rising property taxes, that they’re considering whether they can even afford to stay in Olathe,” she said. “I just want us to work towards making Olathe a place where the people who built their lives here can afford to stay here.”
City Manager Susan Sherman said the city is looking to increase development to help lessen property taxes.
“We know that economic development helps us diversify our tax base,” Sherman said at a budget presentation in July. “So when businesses are paying property tax, that helps make residential property tax maybe less of a burden.”
The city also has a rebate program to help lessen the burden of property taxes on veterans and low-income residents. According to city officials, Olathe rebated about $301,000 in property taxes this year.
Public safety and infrastructure
About 74% of the budget will go to public safety and infrastructure.
The city’s five-year capital improvement plan was passed unanimously on Sept. 15. The plan forecasts long-range projects through 2031.
The new CIP is $757,351,911.
According to a release, the city is prioritizing projects that improve traffic flow and mitigate congestion.
Major projects include:
- Santa Fe corridor improvements
- Fire Station 4
- 119th Street improvements
As part of the city’s efforts to slow spending, some projects from the 2026-2030 CIP will be eliminated, including improvements to 133rd Street and Greenwood and Lone Elm between 159th Street to 167th Street. The budget for the animal shelter was also reduced to $19 million — a $6 million cut.
Why the city is slowing spending
While Sherman said the city is financially strong, changes need to be made.
According to the proposed budget, General Fund expenditures are growing by about $14 million every year, while the city’s revenue only grows by about $3 million, creating what Sherman calls a “structural imbalance.”
The city attributed the gap to rising personnel, healthcare and construction costs, slower projected property tax growth and the expiration of the county courthouse sales tax, which brings in about $4 million annually.
Olathe keeps financial reserves as a safeguard against economic downturns and to get better interest rates when borrowing money for big projects.
Sherman said that without budget changes now, the city’s General Fund reserves would fall below target by 2029.
”We see that, in four or five years, our expenditures are outpacing our revenue,” she said. And so by making some small and medium adjustments now, we will ensure our success in four and five years as well.”
The 2027 budget also freezes hiring on 22 General Fund positions — about 3% of the positions covered by the fund.
Councilmember Jeff Creighton said hiring freezes won’t be a permanent solution.
“We’ve made the tough decision through this budget to do a hiring freeze, which that’s not going to be long-term, that’s not gonna be sustainable, but right now it offers some help,” he said at the Sept. 15 meeting.
Councilmember Matthew Schoonover suggested the city council take an even earlier role in setting spending limits during next year’s budget process.
He said in the future he’d like staff to show the city council what a revenue-neutral budget would look like and what choices would be required to achieve it.
Learn more about the new budget here.
