City to publish 2026 budget with flat tax rate

Published on July 23, 2025

At Tuesday’s meeting, the City Commission approved a not-to-exceed budget for publication that keeps the property tax rate flat for 2026.

 The proposed $62.7 million budget includes:

• Increases in wages and benefits to implement a classification and salary study completed this year that sets City employee compensation at 60% of the market rate to stay competitive.
• An increase in equipment reserves and building maintenance funds for anticipated replacement and maintenance needs.
• Continued funding of external City partners: Newton Area Chamber of Commerce ($30,000), Harvey County Economic Development ($142,275), Health Ministries Clinic ($40,000), and Newton Area Senior Center ($20,000).
• No transfer from the Wastewater Fund to the General Fund for property tax relief. In the past, about $1.14 million was transferred each year from the Water and Wastewater Funds, but in the past couple of years, those transfers were not necessary. Staff are hopeful that trend can continue this year and next year.

The proposed budget projects a General Fund balance of 14.7% for 2026; the City strives to maintain a balance of 15%.

With this budget, the City will exceed the Revenue Neutral Rate for 2026, the tax rate that would generate the same amount of revenue as generated in 2025. To remain within the RNR, the City would need to lower its mill levy by 3.403 mills. That’s because Newton’s assessed valuation rose by an estimated 4.95% for next year because of new development and rising property values.

The Commission will hold public hearings for the budget and the Revenue Neutral Rate at 7 p.m. Aug. 26. At that time, they can adopt the budget as published or reduce it, but they cannot increase it.

Hotel recruitment

The Commission directed staff to continue work on a possible incentive package to recruit a new hotel to Newton that includes:

• Industrial Revenue Bonds: 10-year, 80% property tax abatement, including a sales tax exemption on construction materials.
• Community Improvement District: 2% additional sales tax captured for 22 years to fund improvements.
• Transient Guest Tax: A concessionary rate of 6% to 7% (reduced from the standard 8%) for 10 years, sunsetting concurrently with the IRB tax abatement.

The Commission also requested that staff draft a proposal to incentivize the rehabilitation or redevelopment of Newton’s existing hotels to make them more desirable to visitors. Both proposals will come back to the Commission at an upcoming meeting.

In other action, the Commission:

1. Approved an agreement with the Kansas Department of Transportation for a Carbon Reduction Program grant to extend the Sand Creek Bike Path south to Southwest 14th Street. The pre-design project estimate is $3.64 million. The grant will fund 80% (about $2.9 million), and the City’s share will be about $728,000 plus right-of-way costs.
2. Received the Annual Comprehensive Financial Report and audit report for 2024.
3. Received a second-quarter update on the 2025-2026 Strategic Plan.
4. Rezoned the Cornelius Gardens subdivision at East First and Pine to R-1 single-family residential from the previous PO professional office district.
5. Received an update that the Federal Aviation Administration gave the green light to Newton City/County Airport to proceed on Runway 8-26 construction, although the Airport Improvement Grant agreement is still pending. The Commission approved moving forward with engineering services from HNTB.
6. Approved temporary alcohol permits for the Newton Saddle Club Rodeo on Aug. 1-2 and the Bulls and Barrels Bash on Aug. 9.