The Wichita Eagle editorial board wants higher taxes. Relying on its data and arguments will lead citizens to misinformed and uninformed opinions.
In a recent op-ed, the Wichita Eagle editorial board writes: “From the moment the budget was first proposed in July, city leaders made a point of emphasizing the city’s mill levy — the rate by which property is taxed — hasn’t been increased in 25 years. The 25-year figure wasn’t followed by exclamation points of pride or emojis of sadness. It’s just a fact: For one reason or another, the city’s mill levy hasn’t been increased.” 1
I guess we shouldn’t be too harsh on the Eagle editorial board. They believed city leaders. And, I suppose the language is correct in one sense: “the city’s mill levy hasn’t been increased.”
But a quick look at readily available data shows that the City of Wichita mill levy has increased, and by quite a bit.
I don’t have data going back 25 years, but I have gathered and prepared data from 1993 to 2017. And during that time, the City of Wichita mill levy rose from 31.290 to 32.667. That is an increase of 4.40 percent.
It is true that the Wichita City Council did not pass an ordinance to cause this mill levy rate to rise. This is where “hasn’t been increased” holds a grain of truth.
Instead, the mill levy rate is set by the county based on the city’s budgeted spending and the assessed value of taxable property subject to City of Wichita taxation. Someone estimates the assessed value of property the city can tax, and that is subject to error.
The city acknowledges this when pressed. It’s on video. 2
But city leaders and elected officials act as though the mill levy is subject to the whims of forces beyond their control.
While the city doesn’t have control over the assessed value of property, it does have control over the amount it decides to spend. As can be seen in the chart of changes in the mill levy, the council’s decisions result in a generally rising mill levy. From 1993 to 2017, there were seventeen years in which the mill levy rose from the previous year, and six years in which it declined.
We have an estimating process that ought to be random — too high in half the years, too low in the other half — overwhelmingly producing higher tax rates. This nearly three-to-one ratio is beyond mere chance or coincidence.
Also, while some may argue that an increase of 4.40 percent over two decades is not very much, this is an increase in a rate of taxation, not tax revenue collected. As property values rise, and as the mill levy rises, property tax bills can rise rapidly.
But it doesn’t seem that the Eagle editorial board understands this, as it wrote: “A 2019 budget can’t be expected to function properly under 1994 tax rates. Nearly everything a city does costs more a quarter-century later.”
True, I suppose. But the data tells us that property tax revenue rises, and rises faster than the rate of inflation, if inflation is what the editorial board means when it writes that things cost more.
In the nearby table, I use a hypothetical $100,000 home and track the taxes paid to the City of Wichita. I use a home price index to track increases in residential home values. I use the Consumer Price Index to adjust dollars for inflation.
In the table, a $100,000 house paid $360 in taxes to the City of Wichita in 1994. In 2017, the same house paid $665. The increase is due to rising property values and the rising mill levy.
Adjusting for inflation to 2017 dollars, the tax paid in 1994 was worth $595. In 2017, the tax was $665, in 2017 dollars, of course.
So from 1994 to 2017, the property tax paid to the City of Wichita by this hypothetical house rose by 11.7 percent, in inflation-adjusted dollars.
When the Eagle editorial board writes “Nearly everything a city does costs more a quarter-century later,” the response ought to be “Yes, but property taxes paid by citizens on their homes are rising faster than inflation.”
This needs to be considered in the light of cuts the city has made and threatens in the future.
- Wichita Eagle editorial board. Wichita, it’s time to consider a tax increase. It’s past time, actually. August 17, 2018. Available at https://www.kansas.com/opinion/editorials/article216790960.html. ↩
- Weeks, Bob. Wichita property taxes rise again. Available at https://wichitaliberty.org/wichita-government/wichita-property-taxes-rise/. ↩