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KS: Lawmakers propose lid on property taxes

By   /   October 29, 2012  /   No Comments

An earlier version of this story contained a wrongly attributed quote and erroneous information. Both have been removed in this updated version. We regret the error.

By Gene Meyer | Kansas Reporter

Kansans eye capping one major revenue stream, property taxes as they cap two others, income and sales taxes.

FAIRWAY — Two of Kansas’ biggest tax revenue streams, income taxes and sales taxes, are going to start taking a $900 million annual hit when new tax cuts kick in Jan. 1.

Kansas Gov. Sam Brownback and some fellow Republicans are proposing to cap property taxes on homes and businesses that generate nearly a third of the state’s general fund revenue each year.

Can Kansas afford that?

Absolutely, says Brownback.

Property tax reform is “the next important step we must take to make our state more competitive and to improve the financial well-being of all Kansans,” he said.

Too soon to tell, said Randall Allen, executive director of the Kansas Association of Counties. Many key details won’t be known until proposed legislation formally hits the Legislature, which won’t meet again until Jan. 14.

But among city, county and local governments that rely more on property tax than any other kind, “we have concerns that state services that existed in the past won’t be there in the future,” Allen said.

More than twice as many Kansans, 52 percent, want governments to cut property taxes as opposed to income or sales taxes, a move favored by 24 percent and 21 percent, respectively, Fort Hays State University researchers reported in a statewide opinion survey.

The proposal unveiled Friday is closely modeled on legislation previously introduced by state Rep. Steve Brunk, R- Wichita, to slow soaring property tax bills, which, critics say, have risen more than three times faster than inflation since 1997.

Brunk

Brunk and other backers of the new proposal say Kansas’ current system breeds hidden tax increases for property owners.

Under current law, when the assessed value of, say, a $150,000 home increases $1,000, its property taxes go up also, by maybe $50 or $75 or more.  So, taxpayers end up writing bigger checks, even though no one officially voted to raise property tax rates.

The increases are relative nickels and dimes by state budget standards, but it’s still enough to boost total Kansas property tax collections from $1.97 billion in 1997 to $3.8 billion in 2010, according to state revenue department calculations.

The proposed transparency act would require local cities, counties, school districts or other property tax collectors to offset the increased value by reducing tax rates so that the final bill is the same as last year.

The local taxing governments still would be able to increase property tax collections if they needed the money, but their leaders would have to publicly vote for the increase and publish that vote in newspapers.

“We don’t limit additional funding, but if they want the money, they have to stand up like a man and ask,” Brunk said.

Kansans already pay $1,353 per person a year in combined state and local property taxes, according to the Tax Foundation, a non-partisan research and tax education organization in Washington, D.C. That’s 28th highest in the nation and accounts for about a third of the state’s total $6 billion general fund budget.

Anything Kansas can do to slow rising property taxes is welcome, said Luke Bell, government affairs chief at the Kansas Association of Realtors in Topeka.

“The rate of property tax increases — almost 100 percent in 13 years — is simply unsustainable,” Bell said.

“And property taxes are worse than income taxes,” he said. “You only have to pay income taxes if you make money. You have to pay property taxes in good times or bad.”

Contact Gene Meyer at gene.meyer@kansaswatchdog.org

 

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