County staff warns new state tax cap could limit local economic development

Heather, a county staff member, told the Pratt County Board that the neighborhood revitalization bill had been sent to the governor and that a separate state measure, House Bill 2745, could change how local taxing entities raise revenue.

"House Bill 2745 essentially puts on a cap on the amount of money that you can raise each year through property taxes," Heather said, describing a limit tied to either 3% or the Midwest CPI and a 10% protest‑petition threshold that a voter petition could trigger. She also said the bill preserves the revenue‑neutral‑rate letter process but removes a prior growth factor that had allowed communities to capture valuation growth from new housing development.

Heather warned commissioners that the new rules could limit flexibility for economic development. She used a hypothetical: if Pratt County collected $100,000 this year, next year the allowable increase could be only the lower of 3% or CPI. Exceeding that amount would subject the increase to a protest process and — if successful — the county would revert to the revenue‑neutral rate.

Commissioners asked for clarification about whether petitions would apply across taxing entities. Heather said each taxing entity is treated individually on the RNR (revenue‑neutral‑rate) letter, which will list each entity and include checkbox options that serve as protest petitions. She added that administering the process imposes responsibilities on Sessa (an administrative role referenced in the bill) and that funding for the RNR letter has been extended through 2031.

The staff briefing closed with a cautionary note from commissioners who said the county faces rising fixed costs — including health‑insurance renewals — while revenue flexibility may be reduced if the bill becomes law. No formal action was taken; commissioners asked staff to continue studying implementation options and to coordinate with other taxing entities in Pratt County.