Archive for Wednesday, May 19, 2010

County: Property tax estimate was flawed

May 19, 2010

Projected budget deficits for cities and school districts across Douglas County may have gotten a little less painful Tuesday.

After being questioned by the Lawrence Journal-World, top county officials said they likely were too pessimistic in how much the county’s property tax base had declined as a result of the economic downturn.

As late as Monday, Douglas County Administrator Craig Weinaug was telling cities and school districts in the county to plan for about a 3 percent reduction in their property tax bases — the largest such decrease in at least 20 years. But on Tuesday, Weinaug said that estimate was flawed and that he now expects the decline to be closer to 1 percent.

“I think it is fair to say that there was a gap in our communication,” Weinaug said.

Weinaug said county officials had used outdated numbers when making their previous estimates. More recent numbers from the county appraiser’s office showed that real estate values in Douglas County had not declined as much as expected.

The ramifications for local governments could be that projected budget shortfalls shrink by hundreds of thousands of dollars.

“This is a lot better than what we had first been told,” said Rick Doll, superintendent for Lawrence public schools.

A 3 percent decline in the county’s property tax base was expected to create a $948,000 shortfall and require a 1.01 mill levy increase for the school district, said Kathy Johnson, the district’s director of finance. A 1 percent reduction would result in a $364,060 shortfall and require a 0.38 mill increase, assuming other factors like enrollment remain steady.

The change in numbers likely will have similar effects on other cities, school districts, townships and other governments in the county that rely on property taxes for funding.

In Lawrence, city commissioners are facing an estimated $1.6 million deficit in the general fund for 2011. City Manager David Corliss said the new estimate for property values could reduce that shortfall by about $400,000.

The county changed its property value estimates after the Journal-World questioned why the county was projecting such a large decline when the county appraiser was publishing data in his monthly newsletter that indicated the property tax base had held steady or increased slightly.

In his March newsletter, County Appraiser Steve Miles estimated that the county’s real estate tax base had increased by about 0.8 percent from Jan. 1, 2009, to Jan. 1, 2010. Many homeowners in March received change of value notices from the county that showed their home values had either held steady or slightly increased. As late as May 1, Miles estimated the real estate tax base was up 0.7 percent.

But Weinaug said his staff members were using figures produced several months before March that were several million dollars lower than the current numbers.

County officials aren’t yet guaranteeing that the estimates won’t change again. More data will become available by late June when the county gets information on the amount of personal property in the county and on values for utilities and other structures that are valued by the state assessor.

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