By CRISTINA JANNEY
Hays Post
Many residents in Hays were feeling sticker shock when they received their recent valuation notices.
Hays USD 489 school district is proposing a $143.5 million bond. Early voting starts on April 25 with Election Day on May 10.
The district has released charts to help property owners estimate how much their property taxes will be if the bond passes.
However, a vice president at Piper Sandler, the district's bond counsel, said these are only estimates.
The charts were created based on conservative estimates of the community's valuation. The district's valuation growth has been 2.6 percent over 10 years.
In their analysis, Piper Sandler was even more conservative, assuming a 0 percent to 1 percent growth in valuation during the term of the bond.
"The tax impact that we are showing is the highest that we expect it to be. If [valuation] continues to grow at the rate we have been showing, I expect the tax impact to be less," Clayton Kelley, Piper Sandler vice president, said.
The school district will not receive more money because the valuation has increased.
A higher-than-predicted valuation could result in a lower mill levy.
The school district released a document last week that showed how increased valuation could affect your school bond tax bill.
If a $250,000 home's valuation increased to $287,000, the increase in monthly school bond payments would be about $4.04 per month. This is if voters also pass the sales tax question to help pay for the bond.
Once the mill levy is set for the 30-year-bond, if the overall district valuation grows more quickly than the bond counsel's estimates, the bond could be paid off sooner.
The overall mill levy for schools in the Hays district is one of the lowest in the state. It has decreased from a high of 53.27 mills in 2006-7 to 42.145 in 2020-21. Half of that mill levy — 20 mills — is set by the state.
The district has also proposed a half-cent sales tax to pay off the bond. That would mean 5 additional cents on a $10 purchase.
If that measure passes, the same principle applies to sales tax as it does to property tax. If Hays can grow its sales tax revenue, the bond would be paid off sooner.
The valuation can grow in a couple of ways — the value of the property can grow or new homes and businesses can be added to the tax roles.
Doug Williams, Grow Hays executive director, said local property owners are going to likely see an increase in their taxes regardless of whether the school bond passes.
Some property taxes, such as the statewide tax for schools, is fixed at 20 mills. Property taxes levied for the county and city are not. The city and county base their mill levies on their budgets.
If the valuation goes up and the budgets for the city and county stay the same, the mill levy would be decreased and taxes would stay the same.
However, with the city and county facing high inflation and increased costs, Williams said he thought budgets, as well as the tax needed to support both the city and county, will likely increase this year.
"Is there a cost of building new schools? Absolutely," Willilams said. "There's a cost of not building new schools. That's been my point all along is that in my opinion in the long run, it costs us a lot more not to do it than it does to do it."
The cost of not building new schools is harder to quantify but includes an inability to attract new residents, new businesses, doctors, lawyers, professors or skilled laborers.
All of these assets in the community can increase the property tax base and sales tax revenue, Williams said. Part of the job at Grow Hays is to grow the valuation by bringing in new business and encouraging the construction of new homes, he said.
Williams said a strong housing market with strong property values is much preferred over low property values.
"Everybody gripes about their valuation right up until the time they're ready to sell their home," he said. "Then they say you can't trust the county's valuation because it's too low."
Williams said Hays is not going to be competitive with other communities until it starts investing in its schools.
"Everybody is going to complain about taxes, including me," Williams said. "Nobody likes to pay taxes, but relative to other communities in our state, we have the second-lowest mill levy in the state of Kansas."
Overland Park is the only community with a lower mill levy.
"Part of the reason the [Hays' mill levy] is low is because we have chosen not to make investments in schools and infrastructure," Williams said. "That's not a good thing."
Communities including Dodge City, Garden City, Salina, Junction City, Andover, Great Bend and districts in Johnson County have all invested in schools.
"We're putting ourselves at a terrible competitive disadvantage," he said. ...
"If I'm a retailer and I'm looking at making an investment in Hays, and I look at the community and they're not willing to invest in themselves, why should I come in and invest in this community?" Williams said.
"That's the feedback we're going to get from people we're asking to invest millions and millions in a big factory or big retailer and we're not willing to invest in ourselves. It doesn't make a very good impression."