As the legislative session winds down, the clock has run out on a constitutional amendment that would cap property value increases in Kansas.
After holding a hearing on the amendment on March 19, the chair of the House tax committee decided against moving forward with a proposal passed by the Senate last year.
“There were just too many problems,” Republican state Rep. Adam Smith of Weskan said in a recent interview.
“We need to figure out the answers before we pass the constitutional amendment,” he said.
“If we pass the amendment then we realize there were problems, then we have to pass another amendment to fix what happened?”
The amendment that passed the Senate would have capped taxable property value increases at 4%.
The proposed cap included some exceptions, including when you sell your house. Other exceptions to the cap include new construction or improvements to the property.
Among other things, Smith said there were questions about how such an amendment would affect community improvement or tax increment financing districts that are used to finance commercial redevelopment projects.
Smith said capping the growth in those areas would limit the districts’ ability to generate revenues that are used to pay the bonds issued to pay for those projects.
As an alternative, Smith introduced a similar amendment that would have based property values on the average fair market value of the parcel for the 10 calendar years immediately preceding the year of valuation.
That bill, too, won’t be going anywhere.
Some municipal opponents of the Senate bill testified that it would result in “distortions to assessed valuations and property tax rates that don’t accurately reflect the relationship between a jurisdiction’s tax base and its cost of government services.”
They said the caps would disproportionately benefit higher-income areas where assessments often increase most rapidly, shifting the property tax burden to lower-
income areas where valuation increases are smaller or nonexistent.
“Not all housing markets are the same, many counties do not see the same housing market
or appreciation rate as others,” Meade County Commissioner Randy Leis told the tax committee in written testimony.
“However, these constitutional amendments apply property tax policy to each county without flexibility, making it difficult for individual adjustments to meet community needs.”
Republican state Sen. Caryn Tyson, chair of the Senate tax committee, had advocated for the bill as a way to answer widespread grumbling about property taxes in Kansas.
Tyson said the amendment was an attempt to advance a law requiring local governments to adjust their mill levy to account for rising property values so it brings in the same amount of revenue it did the year before.
“This is another bite at the apple,” Tyson said of the constitutional amendment intended to keep property taxes in check.
In an interview, Tyson said similar amendments have worked in Oregon, Florida and Oklahoma.
“It is disappointing that the House wouldn’t move on such important legislation for Kansas taxpayers,” Tyson said.
Leavenworth County Commissioner Mike Stieben testified in support of the bill, reading a letter in support on behalf of the entire county commission.
“We need to have some kind of ability to limit the increases and the spike people are facing,” Stieben told the tax committee.
“We’re literally going to drive our folks out of our counties and they won’t be able to live where they live, and they want to stay in Kansas,” Stieben said.
“People are so overburdened with property taxes. We’ve got to do something,” he said.
However, others turned out to oppose the amendment, saying it would not produce the intended property tax relief.
They said there are several factors that go into calculating property taxes such as the appraisal, the assessment and the property tax rates set by local governments.
They said property taxes could still increase if local governments increased their budgets.
“The proposed legislation does nothing to guarantee or ensure lowering taxes,” said Ryan Janzen, appraisal consulting manager for Equitable Solutions.
“The nature of the property tax formula allows it to be adjusted to collect the required tax dollars to satisfy the budgets of the various taxing entities,” he told the committee in written testimony.
“At the very least, this will create a shift in tax obligation between less desirable/slower growth properties valued closer to their fair market value compared to highly desirable/higher growth properties.”
