The Johnson County Board of County Commissioners has much to consider as we contemplate the Kansas Board of Tax Appeals decision where BOTA found Johnson County was dramatically overcharging property taxes on commercial real estate, including all Walmart locations in Johnson County. The appraisal method used by our just-retired Johnson County Appraiser to assess the value of commercial property was a recently created gimmick designed to wring more dollars out of retail properties using a smoke and mirrors valuation method that was, in no small part, based on the success of the business in the building. This assessment gimmick is equivalent to saying your home is worth more money than your neighbor’s home… solely because you make more money. This new charade in assessing commercial properties is very different compared to the past assessment method and to the method the majority of County Appraisers in Kansas and Appraisers across America utilize.
A business inside the commercial “box” pays state corporate taxes on the financial success of that business. The building owner paid excise taxes to the cities when the building was constructed for transportation improvements such as the improvement of roadways and now-necessary turn and stop signals. The business also pays ongoing income tax and regularly remits sales tax that is a huge amount of money enjoyed regularly by each taxing jurisdiction. As a result, the business inside the box is a very separate operation from the box itself. There is nothing complicated about this, but some very smart people intentionally saw it different because it fit their agenda and goals.
My greatest concern with the valuation method used by a previous County Appraiser is it INTENTIONALLY masked the true cost of our ever-expanding government occurring at every level and the cost is hidden in every banana, t-shirt and tire so you can’t see the cost of our massively expanding government. To be clear, you have been intentionally lied to as the never-ending escalation of the true cost of your government was incrementally and quietly spread into the products you buy every day. The fact is, Walmart, Target, Lowe’s, HomeDepot, CVS, Walgreens (Big Boxes, et al.) and all other businesses do not absorb these higher property tax costs. They pass these costs on in their products so their margin remains constant. That’s how business operates. Those who say “the Walton family can afford to absorb that cost” clearly have no idea at all about how the Walton family became the wealthiest family on Earth. Hint; it wasn’t by paying for your local government out of their pocket but rather you pay for it out of your pocket, a few pennies or dollars at a time, in property and sales tax.
If the current masked tax burden of the big boxes gets pushed on to residential property taxes, the big boxes costs will go down and so will the costs of their products… and, if the cost of the product doesn’t go down, you can (and you SHOULD) go buy it cheaper from someone else. That’s the magic of competition in the marketplace. And no, this is not a tax break for the Walton family… it’s a tax break for YOUR family because it is your family who is paying for it – not the Walton family.
The fact is, the cost of running your overall government including public education has ballooned at the rate of more than 25% in the last 3 years – a rate of increase that is wholly immoral, confiscatory, disingenuous and completely unsustainable. Many, in all levels of your government, are nervous this charade will be exposed and your personal residential real estate taxes will have to go up. But I submit there is an option to a massive residential property tax increase. How about a smaller government that costs less?
I’m aware many will howl at the thought of government shrinking BUT, that balanced against a huge tax increase is a discussion I tried to have when I first started this conversation almost 3 years ago. In the meantime did you know Johnson County Government has lost 5 consecutive big box property tax appeals? Yes, you read that correctly, FIVE IN A ROW. My concerns and warnings were dismissed along the way by most in the highest levels of Johnson County Government leadership with a smirk, shrugged shoulders and silence. We absolutely should have been preparing for this very scenario, but we did not.
Now, here we are, peering into the abyss and regardless of what anyone in County Government may believe should or could happen, this decision will be made by a judge. The County should have spent precious time planning for a worst-case scenario, but, unfortunately and predictably, that planning did not occur. Panic and finger-pointing will begin as the inevitable is becoming unavoidable.
Community leaders who told you this paradise known as the “JoCo Bubble” would go on forever are responsible for creating this charade where you, the taxpayer, have been been misled…and it happened right before your eyes; one banana, one t-shirt and one tire at a time.