Revenue Neutral Rate

What are SB 13 and HB 2104?
During the 2021 legislative session, the tax lid was removed and the legislature enacted SB 13 and HB 2104. This legislation establishes new notice and public hearing requirements if the proposed budget will exceed the property tax levy’s revenue neutral rate. These requirements take effect this year (2021), for a city’s 2022 budget.

What is a Revenue Neutral Rate (RNR)?
The tax rate in mills that would generate the same property tax revenue in dollars as levied the previous tax year using the current tax year’s total assessed valuation.

How is the Revenue Neutral Rate Calculated?
To calculate the revenue neutral rate, the County Clerk shall divide the property tax revenue for such taxing subdivision levied for the previous tax year by the total of all taxable assessed valuation in such taxing subdivision for the current tax year, and then multiply the quotient by 1,000 to express the rate in mills. (SB 13 Sec. 1(e)(2))

What is a Tax Rate Hearing?
A Tax Rate Hearing is a hearing to exceed the Revenue Neutral Rate (RNR).

RNR = Last year’s total property tax raised in dollars This year’s assessed valuation as of June 15 x 1,000

This information has been provided by The League of Kansas Municipalities, find this and other League information on their website, https://www.lkm.org/