2027 proposed budget aligns with community and BOCC priorities

Today, Johnson County Government County Manager Penny Postoak Ferguson presented her proposed fiscal year 2027 budget to the Board of County Commissioners. Joined by budget leadership for the presentation, she detailed the strategic decisions and actions that were essential in achieving a balanced budget that continues to deliver core programs and services to residents while demonstrating thoughtful, disciplined financial management.

"Through a continued focus on innovation, improvement, creativity and expert analysis, we proposed a budget for next year that maintains county programs and services, despite the pressures of our current and future financial landscape," said County Manager Postoak Ferguson. "The 2027 budget proposal is a responsible plan that balances today's needs while preparing us for the challenges and opportunities ahead."

In alignment with trends seen throughout the country, current expenditures outpace revenues for providing services to residents. Identified during the development of previous years' budgets and confirmed by the county's most recent five-year financial forecast, the imbalance between revenue and expenses will require policy-level changes for long-term financial sustainability.

With these considerations in mind, the County Manager delivered a balanced budget proposal for 2027 through a strategic combination of one-time measures, reallocations and efficiency gains designed to maintain quality of life for the community and preserve the organization's strong financial standing.

Some of the steps the County Manager and county leadership have taken to achieve this balance include:

• implementing a temporary hiring pause for certain tax-funded vacant positions
• renegotiating contracts with vendors
• reducing print publications
• consolidating vaccination sites
• increasing fees for KORA requests, MED-ACT and Sheriff's Office services

This work identified millions of dollars to help close the gap for the 2027 budget, calling for a limited use of reserve funding without jeopardizing the county's financial standing and Triple AAA bond ratings.

However, the five-year forecast shows the budget gap growing to $21.8 million by 2031, with reserves projected to dip below Johnson County's 28% target in 2029 unless additional policy-level decisions are made to decrease expenses, increase revenues or a combination of both.

Details on the proposed 2027 budget

The proposed $1.91 billion budget is comprised of $1.377 billion in operating expenditures and $530 million in reserves. Reserves are important for one-time needs and emergencies; maintaining reserves at or above target levels helps the county achieve the AAA bond rating which allows the issuance of debt at the most competitive interest rates possible - saving money for taxpayers.

The budget includes a flat mill levy of 24.130 mills. Property tax revenue accounts for less than 30% of the county's total operating expenditures, with the remainder coming from other sources including sales tax, charges for service and grants.

The proposed 2027 budget includes no new tax-funded positions in the county taxing district. New positions proposed in 2027 are funded through non-tax revenue or reallocations of existing resources:

• 7 FTEs for a fourth MED-ACT ambulance to return to the county standard of responding to 90% of calls in 10 minutes (funded by fee revenue).
• 8 FTEs for Motor Vehicles front-line staff to address wait times (funded with new state-approved motor vehicle fee revenue).
• 2 FTEs to bring outside litigation in-house (funded by reallocating the current cost of outside counsel).
• 1 FTE to serve as the assistant superintendent for the new Nelson Plant (funded with Wastewater user fees).

Nine new FTES for Parks and Recreation and Library are funded by those district's mill levies or JCPRD Enterprise Funds.

Also included in the proposed 2027 budget is funding for:

• an additional ambulance, public access automated external defibrillator replacement and MED-ACT radios
• the highly successful Eviction Mediation, Landlord Incentive and Property Tax Rebate programs, which help keep residents in their homes
• contractual increases due to inflation
• annual road overlay and fleet programs

When making decisions on funding new positions, non-personnel requests for additional resources or capital improvements, the county manager and her leadership staff ensured the 2027 proposed budget aligns with the priorities of the community as well as the areas of government to which the Board has deemed the highest priority at a policy level.

"Johnson County's strong financial stewardship remains a point of distinction, reaffirmed by Triple AAA bond ratings (achieved by less than 2% of U.S. counties) and national awards that recognize us as a responsible fiscal leader," said Postoak Ferguson. "I appreciate the ongoing partnership between the Board, county leadership and staff to make Johnson County a premier place to work, raise their families and enjoy community amenities."

Revenue and expense challenges

The proposed 2027 budget forecasts a 5.1% assessed valuation increase after appeals, a substantial drop from the 6.5% growth for the current budget year. The county's revenue has been negatively impacted by millions of dollars in state-mandated revenue reductions, the impact of several years of mill levy reductions, slowing sales/use tax growth and a flattening housing market. Looking ahead, the county is monitoring potential risks to property tax revenue and grant funding.

At the same time, inflation, infrastructure needs and a population that is both growing and aging continue to push operating costs higher.

"The proposed 2027 budget is balanced through a combination of one-time measures, reallocations and efficiency gains, but these actions do not fully resolve the growing gap between ongoing revenues and ongoing expenditures," said Postoak Ferguson. "Beginning in fiscal year 2028, additional policy-level decisions will be required to align the county's long-term cost structure with available revenue to maintain current service levels while also meeting reserve targets."

Next steps

The BOCC will hold department, agency and office presentations on June 4 and 18 to learn more about specific department budgets, requests for additional resources, accomplishments and challenges.

Public feedback is important for the budget process, and the public has several opportunities to learn more and weigh in.

• June 23, 5:30 to 7:30 p.m. - Budget open house at Blue Valley Recreation Center at Hilltop (7720 W 143rd St, Overland Park
• June 24, 5:30 to 7:30 p.m. - Budget open house at Johnson County Arts and Heritage Center (8788 Metcalf Ave, Overland Park)
• Aug. 25, 6 p.m. - Public hearing on the budget/Revenue Neutral Rate hearing at Olathe Conference Center at Embassy Suites (10401 S Ridgeview Rd, Olathe)

Commissioners and staff will continue to discuss and deliberate until the scheduled budget adoption on Sept. 3. Details about the county's proposed 2027 budget, current and previous budgets, and budget process are available at jocogov.org/budget.