PITTSBURG, Kan. — Since February, the Pittsburg City Commission has been holding budget work sessions before each regularly scheduled commission meeting. The purpose of these sessions is to provide more public transparency into what each department does, how it interacts with residents, and how they are looking to improve in light of last year’s budget faux pas that unexpectedly raised the city’s mill levy by nearly two points above what was approved.
On Tuesday afternoon, the commissioners and department heads met to begin the formal process of building the budget for fiscal year FY2027. The main focus of this meeting was to ‘set the tone’ for budget discussions going forward by laying out how revenue is collected, how it was allocated in the past, and projections of what the next five years may look like.
Deputy City Manager Jay Byers and Finance Director Missy Scott led the discussion.
First, a breakdown of taxes in Kansas. For every dollar of income, Kansans pay 6.5 cents in federal income tax; 3.4 cents in state income tax; 3.5 cents in property tax, and 4.2 cents in sales and excise taxes, leaving Kansans with 82.4 cents out of every dollar.
Since the city cannot control state and federal income taxes, Byers and Scott focused on sales and property taxes, the two chief sources of the city’s revenue.
For every dollar paid in property taxes, only 26 cents goes to the city. The rest is divided among USD 250 (29 cents), Crawford County (25 cents), special districts (19 cents), and the state (1 cent).
According to budget assumptions and actual returns from 2025 to 2026, the 2025 assessed value (AV) of property was at 7.7% with a mill rate of 50.854. For 2026, the city submitted an AV of 9% with a mill rate of 50.854. However, there were some assumptions that led to miscalculations that resulted in an actual 2026 AV of 6.6% and a mill levy of 52.006, generating $200,000 in revenue that would not have been captured had RHID and TIF properties not been counted. Counting those properties added $3 million to the city’s overall AV.
A Basic Breakdown
The city maintains three basic types of funds: general, utility, and special purpose (restricted) funds. Each is financed in a different way and used for different services.
General Funds. These accounts are financed through sales and property taxes and are used to provide police and fire protection, maintain parks and recreational facilities, and fund the city’s administration. These are the least restricted accounts that can be used when and where needed.
Utility Funds. These accounts are financed through city services, such as water, sewer, and sanitation services and are solely meant to fund those services. They are established to run as more of a business and are supported entirely by charges and fees, not taxes. These funds can be used only to support these operations.
Special Purpose Funds. Funded through special sales taxes, transfers, and service charges, these funds are highly restricted in how they can be used. Each account is specifically designated to fund one budget item, such as Four Oaks, Memorial Auditorium, Atkinson Airport, Pittsburg Aquatic Center, and health care insurance for city employees. The most notable example is the Emergency Services Sales Tax, a one-half percent sales tax that is exclusively used to support police and fire services.
Breakdown of Tax Revenue
Property Taxes. For FY2026, the city collected $6,619,728 in property taxes. Of that, 50% went to pay for emergency services ($2.1 million to police and $1.1 million to fire). The next two largest pieces (each about $600,000 or 9%) went to Parks and Recreation and Administration, while 8% ($550,000) went to Information Technology. The remainder went to debt service, transfers, and property services, with planning and housing taking the smallest share at $170,000, or three percent.
Sales Taxes. In FY2026, sales tax revenues came in at $12,781,661 with the largest portion, $3.67 million (28%) going into the General Fund; $3.03 million each (24%) going to streets and emergency services; $1.5 million (12%) to economic development. The remaining 12% went to the auditorium and capital equipment.
In total, the city collected $19,977,210 in revenue across five major sources: sales taxes (34%), property taxes (33%), transfers (11%), franchise fees (11%), and miscellaneous sources (11%).
2026 Property Taxes
The overall mill levy for Pittsburg residents in 2026 was 159.318 mills. USD 250 accounted for 35% at 55.717 mills, followed by Pittsburg at 52.006 mills (32.6%), Crawford County at 48.639 mills (30.5%), the state at 1.5 mills (0.9%), and the Wildcat Extension at 1.456 mills (0.9%).
Of the 52.006 mill levy by the City of Pittsburg, 37.789 mills went into the general fund, 8.083 mills was set aside for debt service, and 6.134 mills went to Pittsburg Public Library.
Overall, property taxes have risen steadily since 2018, from an AV of $130 million to an AV of $180 million. For most of that time, the city’s mill levy has remained fairly steady, with a low of 50.854 in 2025 to a high of 52.006 in 2026 (the reasons for which have already been discussed). For most of the period between 2017 and 2026, the city’s mill levy has hovered around 51.5 mills.
Even with a relatively stable levy, property tax revenue has increased each year, from $6.1 million in 2017 to $9.3 million in 2026.
2026 Sales Taxes
In 2018, sales tax revenue clocked in at just over $8 million. In 2026, revenues reached nearly $13 million. The city’s sales tax rate is set at 1.5%. By state law, it is limited to a maximum of 2%.
The overall sales tax rate in the City of Pittsburg is 9%. This includes the 1.5% from the city, 1% from the county, and 6.5% from the state.
Of Pittsburg’s 1.5%, 0.5 goes to public safety (the Emergency Services Sales Tax), 0.5 goes to street maintenance, 0.25 goes to economic development, 0.125 goes to support Memorial Auditorium, and 0.125 goes toward capital outlay.
Another source of revenue
Byers pointed out that the city has fully funded accounts whose funds are not immediately needed. To that end, he engages local banks to offer bonds with their best interest rate. He then buys the bonds at the best rate and sells them back at a profit six months later. The city typically collects on at least one bond maturing every month.
When the bond is repaid, Byers divides the principal and interest among the city’s various accounts according to how much was invested from each account. In other words, if 10% of a $10,000 bond came from the general fund, then 10% of the bond’s payout (principal and interest) earned would be returned to the general fund.
The city is not allowed to invest in stocks, but short-term bonds can be a cash windfall.
City Expenditures
Like everyone else, the city must pay its bills, divided into four basic categories: personnel services, contractual services, commodities, and capital outlay.
Personnel Services encompasses anything that applies to city employees, such as health care premiums (the city is self-insured), wages and salaries, retirement contributions, and taxes. This category accounts for 65 to 75 percent of all expenses.
Contractual Services are those services provided by an outside contractor according to a contractual obligation, such as software licenses, professional services, training, or lease payments. This accounts for roughly 10 to 20 percent of expenses.
Commodities are those items needed on a day-to-day basis for the city to function. These can include office supplies (pens, paper, toner, stables, etc.) to gasoline and oil for city vehicles and any chemicals, rock, or asphalt needed for city streets. This accounts for five to 10 percent of expenses.
Capital Outlay is the purchase of new equipment, such as computers, police cars, fire trucks, and so on. Accounts for six to ten percent of expenses.
Projections
Over the next five years, the city expects increases in revenues and expenditures. The two most important are a two percent annual increase in sales taxes and a three percent increase in property taxes over the next half-decade. Property tax revenues are expected to exceed $8 million by 2031 while sales tax revenues are projected to hit $14 million.
While low now, budget reserves are at about $3.9 million, but still above the state mandated requirement of maintaining two months of operations. These reserves are expected to be at $5.5 million by 2031, well above the required state minimums.
Currently, expenditures are just below revenue and are expected to match revenue by 2031. This is a good thing. It is what Byers and Scott refer to as a “structurally balanced” budget.
The city’s current debt is well below maximum limits of $50 million and is expected to be paid off — barring any new debt — by 2033.
The details of the budget will slowly be debated and decided over the next few months. A rough draft is to be submitted for approval in July, and final approval in September after which it is sent to the County Clerk’s office to be certified.
This reporting is made possible, in part, by the Support Local Journalism Project Fund. Learn more at: southeastkansas.org/Localnews
