The Kansas House is poised to move forward with a new plan to hold down property taxes with legislation intended to limit local government spending.
Republican state Rep. Adam Smith of Weskan, chair of the House tax committee, introduced legislation that would require counties to hold elections if they want to collect more than 3% of what they took in the year before in property taxes.
Counties that decide to forego an election – and give up more than 3% in property tax revenues – would be eligible to receive part of a $60 million fund allocated by the state to help reduce property taxes.
The bill also would require local governments – cities, fire districts, sewer districts and the like – to hold an election if they want to grow their property tax collections by more than 3%. However, they would not collect a portion of the $60 million state fund.
Smith said the bill would not apply to Kansas public school districts because they already have a different set of statutes that limit the amount of increase they’re allowed with their local option budgets.
The bill also eliminates a new process enacted in 2021 that requires local cities and counties to hold a public hearing and vote when they want to collect extra revenue from a so-called windfall that could come with increased property values.
The legislation is similar to a bill the House passed last year but couldn’t clear the Senate, which favored a constitutional amendment capping property appraisal increases.
Republican leaders say they are working together to get each bill passed their chambers in hopes that they both get sent to the governor.
A hearing on the House bill is set for Thursday.
The Senate is now considering an amendment that would cap the taxable assessed property value at a 3% increase with several limited exceptions, including new construction or improvements and if there is an error calculating the tax assessment.
For tax year 2027, the final taxable assessed value of the property would not increase by more than 3% compared to the assessed value of the property for 2022.
The Senate bill has already moved out of a committee and is awaiting action by the full chamber.
Last year, the House and Senate largely hit a wall on significantly cutting property taxes, although lawmakers did eliminate the state’s 1.5-mill property tax levy that funds maintenance and renovations of some state buildings.
Last week, Republican leaders from the House and Senate huddled to find a path forward this year.
They agreed to run the bills simultaneously on the same day with the goal of seeing where lawmakers ultimately land.
The idea gives the Legislature an approach that addresses revenue increases while also addressing property value increases.
“The Senate’s going to run theirs at the same time the House is running ours, then they’ll obviously go over to the other chamber,” Smith said.
“If they both pass, they both pass,” he said. “If they both fail, they both fail and we’re back to the drawing board.”
“If one passes and the other one doesn’t, at least we get something out of the deal.”
In a separate interview, Senate President Ty Masterson said each chamber is working together to get both bills passed.
“Instead of being opposing each other, (it’s) more of a work together to do both,” Masterson said.
“We’re definitely processing both, and we hope both of them make it at the end of the day,” Masterson said.
Smith’s proposal was already running into issues with League of Kansas Municipalities, which fears that none of the money from the $60 million fund will flow to cities.
“This legislation creates a fund intended to reward local governments that stay within the threshold, but it offers no guarantee that those dollars will ever reach cities,” said Spencer Duncan, lobbyist for the league.
“Instead, the money remains with counties, which may or may not spend it within city limits or share it with municipalities,” Duncan said in a statement.
“In many counties, cities represent much of the tax base, yet under this structure they receive none of the benefit – creating added uncertainty and instability in city budgeting.”
Duncan added that the bill restricts growth and debt flexibility and as a result, it “risks undercutting cities’ ability to finance infrastructure and meet existing obligations.
“Bond markets rely on certainty, and when cities lose the ability to manage revenue responsibly, investors look elsewhere,” he said.
“The long-term result could be higher borrowing costs, stalled projects, and fewer investments in roads, utilities, and public safety — costs that ultimately fall on residents.”
The Kansas Association of Counties, meanwhile, was still evaluating bill Monday.
“This bill is an important step in the conversation about property taxes and county budgets, and KAC is happy to be a part of those discussions,” said Jay Hall, deputy director and general counsel for the Kansas Association of Counties.
“We look forward to having that conversation…once we have had an opportunity to fully vet and understand the legislation,” he said.
