Friday, July 25, 2014

County lodges opposition to fee’s elimination

By ABBY ECKEL, Herald Staff Writer | 1/8/2014

Abolishing a state filing fee would lead to higher property taxes in Franklin County, Steve Harris said.

The Kansas Bankers Association and the Kansas Association of Realtors want to do away with the state’s mortgage registration fee, which brought in an estimated $47 million to Kansas counties last year, Harris, chairman of the Franklin County Board of Commissioners, told local state lawmakers at a legislative dinner in December. Eliminating the fee could lead to higher property taxes in the county and across the state, Harris added.

Abolishing a state filing fee would lead to higher property taxes in Franklin County, Steve Harris said.

The Kansas Bankers Association and the Kansas Association of Realtors want to do away with the state’s mortgage registration fee, which brought in an estimated $47 million to Kansas counties last year, Harris, chairman of the Franklin County Board of Commissioners, told local state lawmakers at a legislative dinner in December. Eliminating the fee could lead to higher property taxes in the county and across the state, Harris added.

The Kansas County Commissioners Association sent a letter to all Kansas county commissions urging them to adopt a resolution to be sent to Gov. Sam Brownback to keep the mortgage registration fee, according to county documents. Franklin County commissioners adopted the resolution Wednesday morning.

“[The mortgage registration fee] is a one-time cost paid by the home buyer,” Lisa Johnson, county administrator and counselor, said. “I don’t know that there’s any data that [the fee] deters anyone from purchasing a home. It only applies to people that have mortgages for the filing of the mortgage, which protects the mortgage holder by filing that and making it a matter of public record.”

The mortgage registration fee is part of the top legislative priorities identified by the Franklin County Board of Commissioners for the 2014 legislative session, which begins Monday.

The current fee is a one-time payment of 0.26 percent of the principal debt securing the mortgage, according to the resolution. All but 1/26th of the mortgage registration fee is deposited in the county’s general fund, where it is used to finance basic operations of county government, the resolution said, and 1/26th of the fee is remitted to the state treasurer to finance the Heritage Trust Fund, which helps preserve historic structures.

In 2010, the county collected $232,108, or 1.117 mills, from the mortgage registration fee, county documents said. In 2011, the county collected $216,171, or 1.104 mills, and in 2012, it collected $262,460, or 1.235 mills.

“Franklin County is probably collecting less than some of your larger counties,” Johnson said. “This is a fairly large revenue source across the state, especially when you get into larger counties where there’s more debt being filed.”

If the fee is abolished, the lost revenue would have to be recouped somewhere, Colton Waymire, vice chair of the commission, said, and would likely end up coming in the form of higher property taxes.

“Whether or not there’s this fee going forward, we have costs to maintain land records,” Waymire said. “It comes down to ‘What’s the fairest way to do it?’ If we don’t have this fee, it’ll be something else on property taxes. Nobody likes a fee, but this is the fairest way to pay for a service.”

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