Sunday, November 23, 2014

Sen. Tyson downplays local impact of losing mortgage registration fee revenue

By DYLAN LYSEN, Herald Staff Writer | 7/2/2014

Although a new law that went into effect Tuesday eventually will result in higher taxes for Franklin County residents, Caryn Tyson said the increase is minimal at best.

“I don’t see this being a huge impact to any county with [these] kind of numbers,” Sen. Tyson, R-Parker, said Wednesday of the possibility counties would raise property taxes to compensate for the eventual loss of mortgage registration fees.

Although a new law that went into effect Tuesday eventually will result in higher taxes for Franklin County residents, Caryn Tyson said the increase is minimal at best.

“I don’t see this being a huge impact to any county with [these] kind of numbers,” Sen. Tyson, R-Parker, said Wednesday of the possibility counties would raise property taxes to compensate for the eventual loss of mortgage registration fees.

The Kansas Legislature passed a law this spring that began a five-year phaseout of the fee — a process that began Tuesday. The mortgage registration fee, 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 The fee is repealed altogether beginning in 2019, according to state documents.

To cover the shortfall, the Legislature passed a provision along with the phaseout that raised documentation fees. The new law raised fee prices for document processing by county registers of deeds during a four-year period.

Steve Harris, Franklin County Commission chair, said the phaseout eventually would cause the county to raise property taxes to cover the shortfall of revenue the county receives from the registration fee.

“What the state legislators have done is basically voted on a tax increase for Kansas property owners,” Harris said in March. “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.”

The revenue loss for Franklin County is minimal, Tyson said. The county is expected to lose $1,277 in 2015, $2,553 in 2016, and $3,830 in 2017 because of the fee’s phaseout, Tyson said.

“They are negative, and they are expected to be down that much,” Tyson said.

State Reps. Blaine Finch, R-Ottawa, and Rep. Kevin Jones, R-Wellsville, both voted against the bill when it was presented as House Bill 2643. The bill passed the House with a 70-53 vote. Tyson voted to approve the bill, and it passed the Senate with a 24-13 vote. Gov. Sam Brownback signed the bill into law May 14.

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