By JONATHAN ZWEYGARDT
Hays Post

As the Ellis County commission begins the process of setting the 2018 budget, Administrator Phillip Smith-Hanes told commissioners the overall budget picture is “pretty positive.” But Ellis County could be looking at a tax increase.

Smith-Hanes said Monday an early property tax projection is similar to last year’s numbers. Real-estate valuations were up about three-percent and the oil price used to set valuations was up about 50 percent over last year’s numbers, all positive indicators from 2017 for the 2018 budget. He said most of the real-estate valuation increases were from commercial real-estate, while residential property was flat.

The county finished 2016 with more cash on hand – almost $1.75 million – than the anticipated $4.967 million. Smith-Hanes said that was because of higher than expected revenues and lower than expected expenditures in 2016. The county also budgeted $1.5 million from the 2017 budget for 2018 and the county has almost $425,000 available to transfer.

Among things weighing on the 2018 budget is a tax lid imposed by the state that went into effect in January 2017. Under the lid, counties cannot levy more in taxes next year than they levied in the current year, adjusted by the five-year rolling average of the Consumer Price Index. There are some exceptions.

Smith-Hanes, who testified on a bill in Topeka last week that would modify the tax lid, said the change means there is no longer an incentive to keep taxes low, something Hays has done in the past.

“In fact we have an incentive to maximize the amount that we are collecting,” Smith-Hanes said. “If we do not, we’re hamstringing ourselves in future years.”

One of the exemptions, which Smith-Hanes called the most important exception for Ellis County in 2018, is the amount collected from property tax, which has declined in the last three years. Under the exemption, counties can levy the amount up to the three-year-average. In Ellis County the amount of property tax levied has gone down each of the last three years.

Smith-Hanes said that comes to about $14.06 million in property tax the county could levy. That is a 5.7 percent increase over the 2017 levy.

He recommended the commission maximize the amount collected.

“There are certainly needs – infrastructure needs, employee needs – for that funding,” Smith-Hanes said. “Perhaps equally as important, if we don’t maximize the amount that we’re collecting in any given year it’s lost to us in succeeding years.”

But Commission Chair Barb Wasinger said there are a lot of negative factors weighing on citizens right now.

“I would like us to be mindful of the fact that it looks like we have a drought going on, that businesses in town overall are down 20 to 40-percent and agriculture is operating at a net loss,” said Wasinger.

“While the state is encouraging us to raise our taxes, we have a citizenry that’s battening down the hatches even more than before.”

Smith-Hanes said the county department heads continue to look at ways to rein in spending and said this situation is “less than ideal for a local policy maker.”

Commissioners Dean Haselhorst and Marcy McClelland also expressed concern with the current state of the economy.

“It’s not like anybody is out hiring a lot of people year either, so that has not come back on the oil or the ag side,” Haselhorst said.

The county will now begin drafting the 2018 budget and plans to have a proposal completed by June.

In other business, the commission met in two separate executive sessions. No action was taken.