The Kansas Senate on Wednesday passed a constitutional amendment that would overhaul the property tax system in Kansas.
Responding to constituent complaints about property appraisals, the Senate found a two- thirds majority to pass a measure capping property value increases at 4% with some exceptions. The vote was 28-11.
The Senate revived the idea of a cap on property valuations after it failed to get a two-thirds majority last week.
The first proposal would have capped valuation increases at 3%. It failed to pass last week with just 26 votes.
Republican state Sen. Caryn Tyson, chair of the Senate tax committee, was the primary sponsor of the amendment that would go to voters for approval in November 2024.
“This is truly to help property owners and limit the massive valuations we are seeing,” Tyson said Wednesday on the Senate floor.
The bill now goes to the House, where it will likely not be taken up until the 2024 legislative session.
The proposed cap includes some exceptions, including when you sell your house. Other exceptions to the cap included new construction or improvements to the property.
“We have a real problem with valuations in Kansas,” Tyson said last week when the bill was first debated in the Senate.
“These valuations have gotten so high that they are literally putting people out of their homes and their businesses,” she said.
In the Senate, Republican Jeff Longbine of Emporia was one of the more vocal opponents of the bill, arguing that it wouldn’t really do much to lower property taxes.
“This amendment gives property owners a false sense of security,” Longbine said in an interview.
“Valuation has nothing to do with taxes,” Longbine said.
“If people think by passing this constitutional amendment their taxes are always going to be frozen and they’re always never going to go up, they’re getting it wrong.”
The Senate’s top Democrat shared a similar view.
“Legislators are selling a false bill of goods to Kansans with this constitutional amendment,” Dinah Sykes said.
“For many Kansans, this will be a state-mandated, annual property tax hike.
“For all Kansans, this will slash local budgets, and our communities will be forced to raise taxes elsewhere, or go without essential services,” she said.
Local governments were relatively quiet on the bill, remaining neutral although they had questions about the fallout from a cap on property taxes.
The League of Kansas Municipalities, for instance, wanted to know how the cap would affect local governments, which now rely on appraisals based on “fair market value.”
The league wanted to know the “real impact” to property values over time and whether it would lead to the unintended consequence of artificially deflating property values.
In its testimony, the city of Overland Park said the amendment would distort assessed
valuations and mill levies “that do not accurately reflect the relationship between a jurisdiction’s tax base and its cost of government services.”
“Such caps also 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 non-existent,” the city said.
Republican state Sen. Mike Thompson of Shawnee said the public is becoming increasingly infuriated with rising property values.
“We get all these giant valuation increases in Johnson County. People are upset. They say, ‘What do you do?’ They don’t believe it works,” Thompson said.
“At some point this has to stop,” he said last week when the Senate first debated the issue.
“It takes something like this to say, ‘Wait a minute folks, it’s over,'” he said.
Republican state Sen. Virgil Peck of Havana said he’s constantly fielding complaints about property taxes, which are largely in the hands of local governments.
“If this is not the answer, what is the answer. We’ve got to do something for our citizens,” Peck said.
“The No. 1 complaint I’ve heard as a legislator since 2005 since when I was first sworn in – actually before I was first sworn in – constantly people say, ‘You’ve go to do something about property taxes,'” he said.
“It’s not really the state, it’s the locals,” he said during last week’s floor debate.
Constituents, he said, “keep reiterating to me over and over and over to where it’s frustrating, ‘You’ve go to do something about property taxes.'”
Two years ago, the Legislature took a step to address property values and property tax rates.
It enacted 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.
A vote and public hearing is required to take in more money from rising property values.
The Kansas Livestock Association opposed the original bill capping valuation increases at 3%.
“Capping the increase in appraised value will not necessarily prevent higher property taxes
because local units of government will likely just adjust mill rates to raise sufficient revenue,” said Taylor Nikkel, stockgrowers division director for KLA.
The bill, the Nikkel said, could “cause a shift in the tax burden if one class of property outpaces the other in real appraisal values.”
“It could also cause confusion and distort real estate markets if appraised values for tax purposes become disjointed from fair market value.”
