City Commissioners Convene to Discuss 2024 Budget
During Monday's City Commission assembly, commissioners hosted a public hearing on the 2024 budget. The prescribed steps for this process encompass:
A. Conducting a public hearing to deliberate on surpassing the Revenue Neutral Rate (RNR) and the proposed 2024 budget for Salina City. B. Evaluating Resolution No. 23-8144, aimed at imposing a property tax rate that surpasses the Revenue Neutral Rate. C. Deliberating, on first reading, Ordinance No. 23-11168, which allocates the 2024 annual budget.
Background: In accordance with K.S.A. 79-2929, the city's governing body is mandated to conduct a formal public hearing on the proposed budget, allowing taxpayers to voice objections and inquiries. This process requires a public notice in the local newspaper at least ten days prior to the hearing.
Additionally, K.S.A. 79-2988 mandates the calculation of the RNR by the county clerk for each taxing division. If a division chooses to exceed the RNR, specific steps are mandated, including notifying the county clerk, providing a ten-day notice of the public hearing, notifying taxpayers, and holding the hearing. The governing body must then adopt a resolution or ordinance, subject to a majority vote, to approve surpassing the RNR.
On July 3, 2023, the city commission directed the preparation of the 2024 budget using a mill levy rate of 29.602, a midpoint between the current and prior year rates. This rate, though, surpasses the RNR of 28.856 set by the Saline County Clerk.
Subsequently, the city commission authorized the publication of the notice of public hearings for both the 2024 budget and the intention to exceed the RNR on July 17, 2023, with the hearings scheduled for August 28, 2023.
Further budget presentations on July 24, 2023, led to adjustments in the 2024 budget figures. Notably, the published notice of the hearings provided details on the hearing's date, time, and location, along with the maximum limits of the 2024 budget and the property tax to be levied at 29.602 mils.
The proposed 2024 budget, excluding transfers, encompasses total expenditures of $169,186,394—an approximate 7% increase from the 2023 budget of $158,208,438.
The final 2024 budget also establishes a mill levy of 29.602 mils, which allocates funds as follows:
- General Fund: $11,543,689
- Bond & Interest Fund: $3,879,714
- Total: $15,423,403
The overall property valuation, including various property types, has risen by 6.39%. Notably, real estate value, excluding certain deductions, accounts for 7.99% of this growth, while a reduction of 1.80% is seen due to a change in 2006 exempting new commercial personal property.
The impact of the exemption of business machinery and equipment from personal property taxation has led to a 1.80% decline in personal property values for 2023. This decrease is notable, considering that the assessed value on personal property loss has exceeded 83% since 2006.
Sales tax contributes around 33% of the general fund revenue, with the 2024 budget accounting for a moderate increase in sales tax revenue compared to 2022 collections.
The property tax revenue, comprising about 25% of revenue, slightly rises in the 2024 budget, although it has demonstrated inconsistency in the past.
The authorized staffing level for 2024 includes 513 full-time and regular part-time positions, an increase from the 2023 level of 495.
A conversation during the meeting raised concerns about the tax increase and the decision to exceed the RNR. Commissioner Davis emphasized that the notion of raising taxes was related to recouping losses due to inflation, rather than a conventional tax increase. The view was shared that natural growth should contribute to revenue generation.
Commissioner Ryan added that the lowered mill levy could mean a decrease in taxes for those whose property value remained unchanged.
Resolution No. 23-8144, which allows the imposition of property tax exceeding the RNR, passed unanimously, as did Ordinance No. 23-11168, which appropriates the 2024 annual budget.