Initial Seward County budget requests would require a slight uptick in property tax rates, but county commissioners hope to bring those numbers down before making any final decisions.
A mill levy of $0.304022 per $100 of property value would pay for about a fourth of the proposed 2019-2020 county budget of almost $36.2 million, according to a budget fact sheet provided by Seward County Clerk Sherry Schweitzer. That budget would be about 10.61% larger than last year’s of a little more than $32.7 million. The other three-fourths of the budget would be covered by sources, such as department fees and state and federal monies.
That means the owner of a $100,000 piece of property would pay the county around $304 in property taxes, or about $25.59 more than the person would have at last year’s levy rate of $0.278432 per $100 of property value.
About 12.51% of that levy rate, or $.038021 per $100 of property value, would be used for the debt service on the Seward County Justice Center.
Of the nearly $304 the owner of a $100,000 piece of property would pay, about $38, around 18 cents more than last year, would go toward the Justice Center debt service.
“It’s still been kind of a learning curve as to how much it costs and how much to man it,” Chairman of the Board of Commissioners John Culver said of the Justice Center.
Part of the reason a property tax increase might be needed is because total estimated land valuations in Seward County fell around 0.47% from about $3.171 billion to about $3.156 billion.
County Assessor Marilyn Hladky could not officially confirm and may adjust this estimation until after she receives final information from the state before Aug. 20.
While county property valuations as a whole decreased, that does not mean every single piece of property devalued. The overall drop was driven primarily by the devaluation of agricultural land, according to Hladky.
“Some places it went up, some places it went down,” she said.
Hladky said this is the first time in her nearly 25-year tenure that she has lowered the valuation of agricultural land specifically.
She said the state requires that she use a specific formula and that she look at what properties have sold for over the past few years when setting her valuations. When valuing agricultural land, she looks at the past three years.
“For 2019, the value of what ag land was selling for, the market of ag land was going down, so my decrease this year was mostly about ag land,” she said.
To determine the value of agricultural land, Hladky only looked at groups of sales where it was clear that the price being paid was for the land itself.
“I don’t use sales that have buildings on them unless the building value is less than 5% of the selling price,” she said. “A little barn or a crib on the corner isn’t going to affect it, but a big nice yard with bins and machine sheds won’t be in that analysis because it distorts it.”
Culver said the devaluation presents a challenge in crafting the budget, but commissioners hope to reduce those budget numbers before finalizing a county property tax rate.
“We have less money in the coffers to even offer,” he said.
However, Culver said the county is in a good position to manage those challenges.
“Seward’s just so frugal that we’ve done a great job over the years of not hitting even near our lid for the levy,” he said. “Some counties have to get a special election just to get the rate up so they can pay what they have to pay.”
One way commissioners might address the challenge is by pulling money from the inheritance fund, which Culver described as a rainy day fund.
Schweitzer said commissioners try to only pull from the inheritance tax-funded account for projects that benefit all of Seward County, such as property tax relief. She said commissioners use part of the fund to offset property taxes nearly every year.
Another option to limit property tax increases would require commissioners to cut department budget requests.
According to Schweitzer, commissioners review every line item in a budget request in order to eliminate what they deem as unnecessary expenses, something she said not every county does.
Culver said that “nickel and diming,” where commissioners cut numerous small expenses from the budget requests, may not be the most efficient way to meet their goal, though.
“It might come down to personnel,” he said. “Some of these departments have grown that we need to pare them down a little bit, and unfortunately, it’s just a fact of nature.”
Commissioners will finalize their changes to the budget proposal throughout the month of August before aiming to have a public hearing on the budget on Sept. 10. A vote to approve the budget will take place before Sept. 20.
Once other relevant entities, such as the school districts, finalize their budgets, the Board of Equalization, which is made up of the same people who serve as commissioners, will set final levies on either Oct. 1 or Oct. 8.
Culver said commissioners will work with department heads to strategically cut their requests but that the board is willing to make hard decisions.
“If we do a major cut, we’ll ask [department heads] to come back a second time and tell them,” Culver said. “That’s what we—the five commissioners—are elected for, is to do the tough decisions. Sometimes we’re like mom and pop saying, no you can’t go to Dairy Queen tonight, you’ve only got a dollar.”