Revenue Neutral Rate (RNR)

Understanding the Revenue Neutral Rate (RNR)

What is the Revenue Neutral Rate?

• The Revenue Neutral Rate (RNR) is the tax rate that generates the same total property tax revenue as the previous year, using the current year’s assessed property valuations.

• Formula:
  (Last year’s tax revenue ÷ This year’s total assessed valuation) × 1,000

Important Dates

Process to Exceed the Revenue Neutral Rate

1. Public Notification (at least 10 days before the hearing)

• Post notice on the subdivision's website (if applicable)

• Publish in local newspaper

• Include:

  • Proposed tax rate

  • Revenue Neutral Rate

  • Date, time, and location of the public hearing

2. Notify County Clerk

• Must submit:

  • Intent to exceed RNR

  • Proposed tax rate

  • Hearing date, time, and location

Taxpayer Notices

• County Clerk must send a "Notice of Proposed Property Tax Increase" by mail or email (if consented)

• Notice includes:

  • Current & prior years’ appraised and assessed values

  • Prior year taxes

  • Estimated taxes at RNR and proposed rate

  • Dollar & percent difference

  • Public hearing details

Cost Sharing for Notifications

• If the County Clerk pays for notices and is not reimbursed, they may bill the subdivisions.

• Costs are shared based on each subdivision’s proportion of the total tax levy on the notice.

Public Hearing & Voting Requirements

• Hearing must be held between August 20 and September 20

• Taxpayers must be allowed to comment

• A roll call vote of the governing body is required

• The vote must occur during the hearing

• Submit:

  • Resolution/ordinance approving RNR exceedance

  • Certified copy of the vote results

Penalties for Noncompliance

• If a subdivision exceeds the RNR without following the procedure:

  • They must refund over-collected taxes

  • Taxpayers may file a complaint with the State Board of Tax Appeals

  • The Board of Tax Appeals (BOTA) may order refunds or reductions

Special Rules for School Districts

• If a district only exceeds RNR because of state-required school levies, it is not considered a violation of the RNR law.

Certification and Levy Enforcement

• If a subdivision fails to follow the rules and certifies a tax above the RNR:

  • The County Clerk will reduce the levy to comply with RNR

Public Access and Transparency

The Kansas Department of Administration will publish:

• List of subdivisions by county

• RNR and adopted rates

• Which subdivisions held hearings

• Percent change between RNR and actual rates

Information provided by the League of Kansas Municipalities. Learn more at https://www.lkm.org/.