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Officials voice opposition to mortgage fee

2/3/2014

By SARAH KRAMER and KYLE CRANE

By SARAH KRAMER and KYLE CRANE

KU Statehouse Wire Service

TOPEKA -- County officials expressed their concerns last week about a proposed bill that would eliminate the state's mortgage registration fee, saying it would burden counties across the state.

Officials estimate if the fee is repealed, it would result in a loss of approximately $47 million in revenue for counties statewide.

County officials told the Senate Assessment and Taxation Committee counties would need to impose higher property taxes to compensate for the loss in revenue. The hearing came only a day after bankers and realtors in favor of the bill, Senate Bill 298, told the committee the fee is unfair to home buyers, and it puts private mortgage lenders at a competitive disadvantage to federally sponsored lending organizations.

According to Randall Allen, executive director of Kansas Association of Counties, if the bill passes, commercial, residential and agricultural property taxpayers would bear the cost.

"Counties really have very few revenue options," Allen said. "The only option that is really very viable is the property tax."

Allen County Commission Chairman Dick Works said increasing taxes would be the only recourse after already having made significant cuts to the county's general fund.

"We curtailed services, we laid off employees, reduced payments, and we still have a much higher mill levy," Works said. "It's not any fun to raise taxes on people who are already struggling to pay for services mandated by the state."

Jennie Chinn, executive director of the Kansas Historical Society, said eliminating the fee would defund the Heritage Trust Fund. The fund assists with the preservation of properties listed in either the National Register of Historic Places or the Register of Historic Kansas Places.  

"Sometimes the only thing that stands between a dilapidated building on Main Street and a growing, thriving business in a historic building is the Heritage Trust Fund," Chinn said.

According to Chinn, the Heritage Trust Fund receives 1 cent for every 26 cents paid for the fee. This portion of the fee adds up to approximately $1 million annually.

"(The Heritage Trust Fund) not only takes this user fee money, but puts tax money back into the counties and the state coiffures," Chinn said. "We're hiring construction workers and others who are buying materials that then pay sales tax and other things that help the economy."

Committee chairman Sen. Les Donovan, R-Wichita, said the committee would deliberate the bill during the next two weeks.