One of the new laws that might have the biggest impact on Franklin County residents is the mortgage registration tax phaseout, which will eliminate the fee in five years, but could raise property tax rates for residents.
The mortgage registration tax, which has been levied at the rate of 0.26 percent of the principal debt or obligation secured by mortgages, is reduced to 0.2 percent for all mortgages received and filed for record during calendar year 2015; 0.15 percent during calendar year 2016; 0.1 percent during calendar year 2017; and 0.05 percent during calendar year 2018. The tax is repealed altogether beginning in 2019, according to state documents.
To counteract the lost revenue from the phaseout, the Legislature raised the cost of documentation fees in the same provision in House Bill 2643, which will begin in 2015. The new law raises fee prices for document processing by the county register of deeds over a four year period.
State Sen. Caryn Tyson, R-Parker, who voted in favor of the bill, said previously the increase to county fees would help offset the amount of money lost locally.
“The fee on those documents went up in order to help eliminate the mortgage registration fee going away,” Tyson said in March when the provision was part of Senate Bill 298 and passed by the Senate. “The bill that passed, I know it’s not perfect, it does lower the amount of fees.”
The new bill was crafted to cut some of the fees charged to individuals using the service, Tyson said. If an individual has a mortgage of $75,000 or less, she said, the bill would cap the fee amount at $125.
“People who don’t have mortgage fees will be paying the document fees as well,” Tyson said. “So everyone [who uses this service] will be paying it.”
“They were trying to offset it, but it still will not make up totally for the entire amount,” Harris said in March. “I believe what will happen with the increase with page documentation fees, banks will find ways to use fewer pages in the documents that they present. So that will also reduce the income over time.”
With county taxes most certainly needing to be raised if the bill becomes law, Harris said, the state legislators will be the ones to blame.
“What the state legislators have done is basically voted on a tax increase for Kansas property owners,” Harris said. “There’s really only one way to make up for the loss of revenue, and that’s through potentially the increase of taxes, and that can be laid right at the feet of the legislators.”
But because the law is a phaseout and not a complete repeal the law has not yet caused serious problems, Harris said Monday, although the law has already become noticeable while the commission drafted the county’s budget in June. He said the commission will continue to deal with the law as the phaseout becomes more of a burden on the county in upcoming years.
“[The commission] did look at what the register of deeds budget was going to be with the reduction that will be occurring this year as we did with all other budgets. But as far as affecting the budget drastically on the implementation of that law, not at this point,” Harris said of the county budget talks. He said banks only are required to use the first and last page of the documentation, which allows for less documents and less revenue.
“We won’t see the impact right away. We’ll see the impact gradually overtime,” Harris said. “We know though it will affect the revenue.”
DUE PROCESS RIGHTS
The hottest topic of the 2014 Legislative session was the elimination of teachers due process rights, or tenure, along with the increase to education funding. The issue has become such a hot issue with teachers and advocates that House Minority Leader Paul Davis, D-Lawrence, has made it a large portion of his campaign for governor against incumbent Gov. Sam Brownback.
Brownback signed Senate Substitute for House Bill 2506 into law in April, which aimed to satisfy a court order to address inequity between school districts in K-12 education funding by closing the gap in the capital outlay and local option budget funds. But the law includes a more controversial caveat to remove due process rights, or tenure, for public school teachers, a protection teachers have enjoyed since 1957.
The governor’s signature in April was a “devastating blow” to public schools, Megan Morris, president of Ottawa Education Association, said. When the Kansas Supreme Court ordered legislators this spring to fix funding inequity between school districts, few would have guessed lawmakers’ solution would involve removing teachers’ due process or tenure rights.
“It hurts Kansas students because teachers are now going to have to worry about who they’re pleasing with every decision. It’s not helping anyone when teachers are teaching in fear,” Morris, a teacher at Lincoln Elementary School, 1102 N. Milner Road, said in April. “The other thing that concerns me is the possibility of losing good teachers because Kansas is [ranked] 42nd in pay and you have no due process rights.”
But proponents of the bill believe it will help Kansas weed out bad teachers.