Last week the House and Senate approved major property tax reforms with overwhelming, bipartisan majorities. The legislation now sits on Gov. Laura Kelly’s desk, awaiting her signature.
With one stroke of Gov. Kelly’s pen, people who couldn’t make their May 10 property tax payments on time will have until Aug. 10 to pay, with no penalty or interest. County treasurers will be authorized to establish payment plans. Home valuations could no longer be increased solely due to routine maintenance and repair.
And finally, local elected officials will have to be on the record next year, voting for the entire property tax increase they impose; no more back-door increases from valuation changes while claiming to “hold the line” on property taxes.
These reforms were approved by a 35-2 vote in the Senate and by an 89-23 margin in the House. A public opinion survey shows that at least 75% of registered voters want local elected officials to vote on their entire property tax increase; 14% are undecided, and only 11% are opposed. But local government officials don’t want to take ownership of their property tax increases, and that’s the main sticking point.
They say they’re all for transparency, but that’s only if they get to decide the definition of transparency. In their definition, they’re entitled to tax increases from inflation and new construction. Loopholes rendered the property tax lid ineffective, and that’s why Democrats Tom Holland and Anthony Hensley led the effort to defeat loophole amendments on the Senate floor.
The House Taxation Committee voted to delay implantation a year because they didn’t want to burden local officials with something new next year when they still may be dealing with the coronavirus situation. That “something new” is merely sending a notice to taxpayers to let them know how much they want to raise property tax, and then holding a public hearing to get input.
Rep. Ken Corbet expressed frustration that the committee seems to favor government interests over taxpayer interests: “I am sick and tired of taxpayers getting the short end of the stick from this committee.”
It was the House Tax Committee in 2015 that delayed implementation of the property tax lid, which led to a 6% average county mill levy hike in 2016. Fortunately, taxpayer interests prevailed this time, and the delay was later removed.
Taxpayers have been getting the “short end of the stick” on property taxes for a long time. Since 1997, property taxes for the operation of local government increased by 180%, while inflation was just 52%. That’s worse than education property taxes, which “only” jumped 142%.
Kansas has one of the highest effective property tax rates in the nation, and especially so in rural areas. According to the Lincoln Institute of Land Policy, Kansas has the highest effective tax rate on rural commercial property in the nation, the third highest rate on rural industrial property, and the 14th highest rate on rural residential property. The property tax on a rural home valued at $150,000 is almost three times as much as in Utah and Tennessee, where local officials have to vote on property tax increases.
Gov. Kelly can give Truth in Taxation to Kansans. She can stop home valuation increases solely for routine maintenance, and she can waive penalties and interest on late property tax payments this year. Or, she can give taxpayers the short end of the stick with her veto pen and grant the wishes of local government officials.
Here’s hoping she puts taxpayer interests first.
Dave Trabert is the chief executive officer of Kansas Policy Institute.