A new property tax lid took effect on January 1, but Manhattan residents may not experience the property tax savings statehouse leaders intended when they passed the bill two years ago. At Tuesday night’s Manhattan city commission work session, city staff introduced the first draft of the 2018 budget that calls for a 3.194 mill increase, or roughly $2.5 million. The city would collect $28,393,186 in property taxes if the proposed mill levy passes later this summer.
“We’re awful early in the process,” said Bernie Hayen, director of finance. “We wanted to get out the gate fast, in case an election might be imminent.”
The finance department received the Capital Improvement Programs budgeting software last December, and has plugged numbers ever since. Under the new property tax lid, municipalities can only raise the mill levy so much until a special election would be needed.
Hayen said the city could raise property taxes by as much as $3 million, and still fit within the confines of the new property tax lid. Manhattan is the beneficiary of many exemptions under the new property tax lid. Excluded revenues include new improvements valuation, increased personal property valuation, and property which has changed in use. Additionally, some expenditures are excluded such as bond and interest payments, increased costs for law enforcement, and any property taxes levied by subordinate governments such as Riley County Police Department and Manhattan Public Library.
“I’m a little bit disappointed. I got behind the idea the tax lid would be a constraining factor on a budget,” said commissioner Wynn Butler. “What I’m hearing is the tax lid is a figure of someone’s imagination. What we figured out how to do is exempt everything.”
Butler spoke for nearly three minutes about his disapproval of the commissions spending in recent years. He said the mill levy has increased by 4 mills during his time on the commission. Mayor Usha Reddi also expressed her intention to find ways to pair down the budget.
Commissioners also heard a proposed $911,131 in capital improvement funding toward the 2018 – 2022 Capital Improvement Program. The requests for 2018 mark an increase of more than $311,000 over the 2017 budget.
“I’ve already asked the departments to look hard at that, basically I’m at the assumption we need to bring that below the 2017 level,” said city manager Ron Fehr.
Fehr added he would look to see the figure cut in half, which would equal roughly one mill. Commissioners will have another budget work session on June 13.
Riley County Police Director Brad Schoen also delivered a report on the police department. The Riley County Law Board will vote on a budget at their meeting on May 15. In an interview with KMAN, Schoen said he 1.7% increase equates to roughly $320,000, and includes an .8% cost of living adjustment, shift differential pay, and educational pay.
Schoen said there was a spike in Level 1 property crimes in January and March, which correlated with a spike in vehicle and home burglaries done by two or three different groups of adolescents.
