By BILL FIANDER
Washburn Public Policy Lecturer
Fresh off citizen vitriol for rising property taxes during their 2024 campaigns, a fortified Republican super-majority Kansas Legislature began loading their prized horses into the starting gate of this year’s Property Tax Derby.
Kansas GOP leaders eye this as the final jewel in the coveted Tax Cut Triple Crown – sales, income, and property. In previous sessions, they successfully bet on both Governor Kelly’s food tax horse (Axe The Tax) and their income tax horse (Trickle Down) sired from the Brownback stud farm.
Elected jockeys have three levers at their disposal to determine the pace of property taxes in the derby. The State totally controls the first lever (assessments) and oversees county appraisals for the second lever (property values) which are really at the mercy of market forces. The most powerful lever (mill levy) is nearly all in the grip of local government.
Property taxes fund 60%-100% of local government budgets, but less than 1% of state government. Property tax revenue is the lifeblood for local services such as schools, police, roads, parks, transit, libraries, etc. with some hemorrhaging. Conversely, they mean virtually nothing to the State budget.
With that in mind, let’s handicap three GOP entrants while Democrats snooze in the barn.
· “Cap The Tax” (SCR 1603) – Senate Taxation Farms first entry is a Constitutional Amendment capping taxable property values at 3% annually thus artificially controlling property value – not the free market. This well-intentioned concept has all sorts of unintended consequences. Said cap is lifted for home sales and improvements causing vastly different taxable values on the same block while discouraging mobility and investment for an even tighter housing market. Local budgets get squeezed by inflation over 3% but still could effectively make themselves whole by pulling their prodigious mill levy lever. Ultimately, voters must approve if it gets that far. Given the House killed a 4% cap last year, this horse may get stuck on the rail again.
· “Building Biscuit” (SB 35) - Senate Taxation Farms’ second entry would repeal the State’s paltry 1.5 mill levy that goes towards deferred maintenance of state buildings. This is the most local government-friendly entry because it does not jeopardize local revenue. Building maintenance would shift to the State’s general fund made up of income and sales tax. Without a dedicated mill levy, universities are rightfully nervous their proverbial can could be kicked down the road. Homeowners would save a whopping $22 annually on a $200K house. This horse has the best legs for a stretch run but little return for wagers.
· “School Levy Sugar” (HB 2011) – The entry from House Taxation Stables has a similar profile to Building Biscuit. Instead of building maintenance, 1.5 mills are wiped from the State’s 20 mills for local schools. Relief for homeowners is just as paltry. Ostensibly, local schools would be made whole through the State’s sales and income taxes. But it puts their can on the line instead of universities. Without Supreme Court oversight for a school funding case, this horse is drifting a little wide at the turn.
If these don’t excite everybody, look for late entries like last year’s prized thoroughbred – exempting residential value from the State’s 20 mill school levy, expanding the homestead exemption, OR the ultimate horse trade – Medicaid expansion.
To paraphrase the State’s highest-paid employee (Bill Self), don’t worry about the mules, keep loading the wagon and don’t crash local services.
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Bill Fiander is a lecturer at Washburn University specializing in public administration, urban planning, and state/local government. He is the former planning and development director for the City of Topeka.
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