Lawmakers are blocking Gov. Laura Kelly’s plan for reducing property taxes because of skeptics who think it won’t have much impact.
The House Appropriations Committee on Tuesday voted 15-7 to set aside a proposal for returning $54 million to local governments across the state for reducing property taxes.
The House committee’s action mirrored a similar action already taken last month by the Senate’s budget-writing committee.
Republicans in the House and Senate questioned whether local governments would use the money to reduce property taxes and, even if they did, would it make much of a difference.
“My concern…is I don’t know that it reduces property tax,” said Republican Rep. Steven Johnson, a member of the Appropriations Committee and chair of the House tax committee.
“I think our local governments will generally make good decisions with it,” he said. “They may address road issues. They may address mental health issues with those dollars as well.”
Johnson said he would be hesitant to use that money, worried that the state could consistently make those payments to local governments in the future.
Republicans said there are other proposals that could be used to address property taxes, including one bill that would direct a portion of state sales taxes to the Local Ad Valorem Tax Reduction fund.
However, disbursements from the fund would have to be approved by the Legislature.
The governor’s tax council recommended putting money back into the Local Ad Valorem Tax Reduction Fund, which sends money to local governments to help keep property taxes low.
The state last put money into the fund in 2003. The Legislature has suspended about $898 million in transfers to the fund from the second half of fiscal year 2003 through fiscal year 2019.
Democrats said returning money to local governments is one way the state can address property taxes and rising property values.
“The reason why taxes have gone up on local governments is because we captured those dollars and refused to send them back home,” said Democratic state Rep. Tom Burroughs. “The only thing they could do is raise the property tax or sales tax.
“I happen to believe that local governments are closer to the people,” he said. “They know what their communities need. I truly believe that sending that money back home is the fair and equitable thing to do.”
Other lawmakers were not so sure. They didn’t trust the local governments to lower taxes and believed the impact on property owners would be negligible.
Committee Chairman Troy Waymaster said the proposal would have saved $25 for the average homeowner statewide and $16 to $17 in the areas he represented.
Republican Rep. Stephen Owens said the $54 million was just a fraction of the more than $36 billion in assessed property values across the state.
He said he didn’t think it would make a substantial difference for property owners.
Owens said he thought the Legislature needed to take a more comprehensive approach to property taxes.
Republican state Rep. Kristey Williams, a former mayor, said local governments have already found a way to adjust for the loss of the revenue after 2003. She, too, was concerned whether the money would go to long-term tax relief.
Democratic Rep. Brett Parker, a member of the Appropriations Committee, said there were plenty of critics, but no constructive proposals offered for addressing property taxes.
“There were a lot of criticisms offered by Republicans,” Parker said. “What I didn’t hear were any concrete proposals to relieve property taxes in any other way.”
Trey Cocking, deputy director of the League of Kansas Municipalities, said his group will continue to work with the Legislature to find ways to reduce property taxes.
Cocking said he thought the law was written clearly enough to require local government to lower property taxes.
He said the bill would have saved $25 in taxes on a $200,000 home.
“Property tax relief starts off with small bites,” he said. “Unless you’re going to do something radical, you’re going to have take small bites to get there.”
