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New Kansas Property Tax ‘Lid’ Could Affect County Health Departments

Andy Marso
Heartland Health Monitor
Last fall, the Pottawatomie County Health Department, housed in the building on the far right, dealt with a pertussis outbreak that sickened 110 people.

A controversial restriction on local property tax revenue in the recently passed Kansas tax bill could have implications for county health departments.

Republican legislators inserted the property tax “lid” into the $400 million tax bill as a sweetener for colleagues who were loath to vote for a tax increase. It requires local governments to get voter approval to take in any tax revenue above the rate of inflation that comes from increased property values.

The needs of county health department don’t always track predictably with inflation, especially if the county has an outbreak of infectious disease.

“We’re going to do what we need to do to protect the public, irrespective of what the state of Kansas does to us,” said Hannes Zacharias, the county manager of Johnson County, which has dealt with a couple of infectious disease scares in the past year. “How we’re going to be able to recoup those expenses is unclear.”

Zacharias’ county was part of a Kansas City measles outbreak last year and took the lead in tracking and testing hundreds of contacts after an Olathe Northwest High School student developed tuberculosis in the spring.

Zacharias said Johnson County can continue resource-intensive infectious disease control by dipping into reserve accounts kept for purposes of maintaining the county’s AAA bond rating.

But the property tax lid would make maintaining those reserves more of a challenge.

“What happens at the back end of that once you’ve made those expenditures?” Zacharias said. “Can you fill the tank back up, if you will?” 

The property tax lid contains some exemptions, but none specifically for health expenses.

Legislators have admitted that a drafting error has caused confusion about whether the lid takes effect July 1 of this year or Jan. 1, 2018. Republican leaders have said the intention was to start in 2018 and they will try to clarify that in law Friday at sine die, the last day of the legislative session that traditionally is just a formality.

Even if the change is made, local officials have questioned whether the bill’s timeline for having an election to approve a revenue increase and the timeline to set their annual budget can mesh.

Michelle Ponce, executive director of the Kansas Association of Local Health Departments, said it’s too early to tell how the tax lid will affect local health departments, which have different funding mechanisms.

“It would be something we’re concerned about in terms of the overall county budgets and how that would affect health departments,” Ponce said.

Leslie Campbell, director of the Pottawatomie County Health Department, said county officials there discussed the tax lid in a meeting this week and shared their concerns about it.

Campbell said she was told that if the lid takes effect this year, the county of about 23,000 people could raise its budget by no more than $200,000 unless it held an election — which alone would cost $60,000.

Pottawatomie County dealt with a major pertussis outbreak last year that sickened 110 people.

To stem the tide, her staff of 11 tracked thousands of contacts at schools and workplaces and distributed 1,400 free vaccines.

“I had overtime, of course, and our phone bill was twice as much (as usual),” Campbell said.

The state paid for the immunizations, but Campbell’s department waived all of the usual administrative fees in order to entice more people to get them.

Those fees usually defray the cost of things like syringes, sterilizing alcohol and bandages — as well as the nurses’ time.

“The county ended up paying for all of that,” Campbell said. “The county just absorbed it as part of the budget. Luckily we had a little cushion for some of that.”

With only 26 pertussis cases so far this year in Pottawatomie County, Campbell believes it is finally past the outbreak zone. But her department serves a vaccine-resistant community in St. Marys and is now dealing with another challenge: an outbreak of varicella, or chicken pox.

Like Zacharias, Campbell said efforts to contain infectious disease would continue in her county regardless of the tax lid. But if resources become scarce, it could force the department to scale back other health-related services.

“At some point, I think, the discussion will be, what services does each health department absolutely have to provide?” Campbell said.

Zacharias said his county is monitoring the spread of avian flu, which threatens the Kansas poultry industry but has yet to cross over into humans.

“Should that happen, things are going to go pretty quickly into crisis mode,” Zacharias said.

Andy Marso is a reporter for KHI News Service in Topeka, a partner in the Heartland Health Monitor team.

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