Revenue Neutral Rate & What You Need to Know
What is Revenue Neutral Rate?
Revenue neutral is when a taxing jurisdiction budgets the exact same amount of property tax revenue, in dollars, for the upcoming budget year as they did for the current year.
For example: If a taxing entity uses $1 million of property tax revenue in the current year, being revenue neutral means they plan to only use $1 million in the next year as well. But if a taxing jurisdiction plans to use more property tax dollars in the next budget year compared to the current year, even $1 more, they would exceed revenue neutral and need to hold a public hearing.
The revenue neutral rate is the mill levy rate to generate the exact same amount of property tax dollars as the year before, using the current tax year's total assessed valuation.
Why are we letting you know about the taxpayer notification form?
Due to Kansas law now in place to promote transparency, we want to help property owners understand the notification. The notification is sent to explain each jurisdiction's intent or non-intent to exceed revenue neutral (intent to exceed revenue neutral = the use of more tax dollars than the year before). This is not a new appraisal notice; those are mailed out in March each year.
What do I need to do?
This mailed notice is not a bill; it is for information purposes only. No action is needed at this time. If you would like to attend a meeting to learn more, please refer to your list of hearings on the reverse side of this notice.
Will my property taxes increase as much as my appraised value increased?
Property values are a reflection of property sales in the local real estate market and/or improvements or changes made to an individual property. When property values increase, that does not necessarily mean more property taxes will be assessed. In essence, the valuation of property determines each owner’s slice of the pie, but not the size of the pie.
Property taxes are determined by taxing entities such as local cities and counties, school districts, libraries, townships, improvement districts and fire districts when they determine yearly budgets.
Where will the Public Hearings be held?
Each taxing entity is required to host a public hearing if they plan to utilize more tax dollars than the previous year. Your list of tax districts you pay is on the reverse side of this mailer. Note: Schools are required to be reported by separate funds, but hold one combined hearing. Recreation Commissions are separate tax districts.
What exactly is on the taxpayer notification form?
- The revenue neutral rate of each taxing subdivision relevant to the taxpayer's property.
- The proposed property tax revenue needed to fund the proposed budget of the taxing subdivision - if the taxing subdivision notified the County Clerk of its proposed intent to exceed its revenue neutral rate.
- The proposed tax rate is based upon the proposed budget and the current year's total assessed valuation of the taxing subdivision - if the taxing subdivision notified the County Clerk of its proposed intent to exceed its revenue neutral rate.
- The tax rate and property tax of each taxing subdivision on the taxpayer's property from the previous year's tax statement.
- The appraised value and assessed value of the taxpayer's property for the current year.
- The estimates of the tax for the current tax year on the taxpayer's property based on the revenue neutral rate of each taxing subdivision and any proposed tax rates that exceed the revenue neutral rates.
- The difference between the estimates of tax based on the proposed tax rate and the revenue neutral rate on the taxpayer's property described in subparagraph
- For any taxing subdivision that has a proposed tax rate that exceeds its revenue neutral rate; and
- The date, time, and location of the public hearing of the taxing subdivision, if the taxing subdivision notified the County Clerk of its proposed intent to exceed its revenue neutral rate.