The City of Wichita property tax mill levy declined for the second year in a row.
In 1994 the City of Wichita mill levy rate — the rate at which property is taxed — was 31.290. In 2017 it was 32.667, based on the city’s Comprehensive Annual Financial Report and the Sedgwick County Clerk. That’s an increase of 1.377 mills, or 4.40 percent, since 1994. (These are for taxes levied by the City of Wichita only, and do not include any overlapping jurisdictions.)
In 2016 the mill levy was 32.685, so the mill levy dropped by .018 for 2017. That’s a drop of 0.06 percent, and while small, it’s a refreshing change. It’s also the second year in a row for a decrease in the mill levy.
The Wichita City Council does not take explicit action to set the mill levy rate. Instead, the rate is set by the county based on the city’s budgeted spending and the assessed value of taxable property subject to Wichita taxation.
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 city usually decides to spend more than the previous year’s mill levy generates in taxes. Therefore, tax rates usually rise.
It’s more common for the mill levy to rise rather than to fall. In those years, the council does not take responsibility to the rise. It will be interesting to see if council members take credit for the falling mill levy this year.
An increase of 4.40 percent over two decades may not seem like much of an increase. But this is an increase in a rate of taxation, not tax revenue. As property values rise, property tax bills rise, even if the mill levy rate is unchanged.
The total amount of property tax levied is the mill levy rate multiplied by the assessed value of taxable property. This amount has risen, due to these factors:
- Appreciation in the value of property
- An increase in the amount of property
- Spending decisions made by the Wichita City Council
Application of tax revenue has shifted
The allocation of city property tax revenue has shifted over the years. According to the 2010 City Manager’s Policy Message, page CM-2, “One mill of property tax revenue will be shifted from the Debt Service Fund to the General Fund. In 2011 and 2012, one mill of property tax will be shifted to the General Fund to provide supplemental financing. The shift will last two years, and in 2013, one mill will be shifted back to the Debt Service Fund. The additional millage will provide a combined $5 million for economic development opportunities.”
In 2005 the mill levy dedicated to debt service was 10.022. In 2017 it was 8.511. That’s a reduction of 1.511 mills (15.1 percent) of property tax revenue dedicated for paying off debt. Another interpretation of this is that in 2005, 31.4 percent of Wichita property tax revenue was dedicated to debt service. In 2017 it was 26.0 percent.
This shift has not caused the city to delay paying off debt. This city is making its scheduled payments. But we should recognize that property tax revenue that could have been used to retire debt has instead been shifted to support current spending. Instead of spending this money on current consumption — including economic development spending that has produced little result — we could have, for example, used that money to purchase some of our outstanding bonds.