MORTON COUNTY, Kan. — The Morton County Board of County Commissioners (BoCC) is taking decisive legal action to secure the financial stability of the Morton County Hospital. Following the advice of state leadership, the BoCC has directed the County Attorney to immediately file suit against the State of Kansas, specifically naming Kansas Department of Revenue (KDOR), to recover $2,152,421.36 in dedicated sales tax revenue wrongfully diverted over the last nine years.
This action is taken to correct a severe administrative error that has continually threatened the funding of our vital community health services.
The Core Problem: A Clerical Error and Nine Years of State Negligence
In 2015, the people of Morton County voted overwhelmingly to enact a 1% countywide sales tax with a single, clear mandate: to fund the operations of the Morton County Hospital. This dedicated revenue was meant to stabilize the Hospital, which had been forced to rely on costly statutory loans (No Fund Warrants) in the years prior.
However, due to a technical, clerical error in the initial legal resolution passed by the County, KDOR implemented the tax using a general distribution formula (K.S.A. 12-187(b)(1)) instead of the dedicated healthcare provision (K.S.A. 12-187(b)(5)).
KDOR continued using the incorrect general distribution formula, despite a corrected resolution being passed and sent to the KDOR by the County prior to the implementation of the approved tax and distributions by KDOR. Despite the KDOR’s receipt of the corrected resolution, the agency used the general distribution formula without providing notice to the County. KDOR does not dispute receipt of the corrected county resolution in 2015, but attributes its actions on a department policy to implement the tax pursuant to the resolution that placed the issue on the ballot.
The result of this policy can be classified as nothing less than administrative voter nullification and is repugnant to our democratic processes, according to a spokesperson.
●Financial Injury: For nine years, KDOR distributed nearly half of the revenue intended for the Hospital to the three county municipalities (Elkhart, Rolla, and Richfield). This administrative failure resulted in a direct loss of $1,857,881.05 in dedicated principal.
●Consequential Damages: The shortfall forced the County to incur substantial new debt in 2023 and 2024 to cover hospital operating costs. Our total claim includes an additional $294,540.31 to cover the interest and legal fees associated with that necessary new debt incurred by the County, bringing the claim total to over $2.15 million.
Establishing the
Narrative:
State Fault, Local Unity
The narrative must be clear: The liability rests with the State of Kansas.
1. Administrative Validation: Attorney General Opinion 2025-9 definitively ruled in May 2025 that the original error was purely clerical and that the tax revenue must, by law and by voter intent, be remitted entirely to the County for the Hospital. In response, KDOR immediately began distributing the county sales tax proceeds pursuant to the originally intended and correct dedicated healthcare provision (K.S.A. 12-187(b)(5)) in July 2025.
2. Solidarity, Not Conflict: The cities of Elkhart, Rolla, and Richfield were simply the unintended recipients of checks sent monthly by the State agency. The County views our municipalities as essential partners, not as adversaries. We are united in the demand that the State Treasury fully compensate the County for this sustained error.
3. Shift to Judicial Action: After presenting our claim to the Joint Committee on Special Claims Against the State (JCSCAS), the BoCC has been advised by the leadership of the Kansas Legislature that this issue of KDOR’s administrative negligence is most appropriately and effectively addressed through the state court system.
Therefore, the BoCC has directed the County Attorney to immediately initiate litigation against the State to secure a judicial judgment that compels the State to make the Hospital whole as the voters of Morton County intended.
Commitment to
Transparency
We understand the public’s frustration and concern over this long-running issue, especially given the crucial nature of our local healthcare services.
We want the citizens of Morton County to know that the BoCC is fighting to ensure the clear will of the voters is finally enforced. We will not compromise on recovering the full $2,152,421.36 and ensuring the financial future of our Hospital. The offices of the
Morton County Clerk and Treasurer have committed full support and we are confident the County’s coordinated effort will prevail.
The BoCC is committed to maximum transparency throughout this judicial process and will provide regular updates to the public as the litigation progresses.
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