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Kansas To Consider Tightening Limits On Local Property Taxes

Stephen Koranda
KPR/File photo

Kansas lawmakers will consider a proposal to place new limits on local property taxes during the annual legislative session that opened Monday.

The Republican-controlled Legislature last year enacted a law designed to lessen annual increases in the property tax levies that cities and counties rely heavily upon to finance local services. The restrictions are set to take effect in 2018.

But GOP Sen. Jake LaTurner, of Pittsburg, who pushed for those limits, has a new bill to tighten them and have them take effect in July. The Kansas Association of Realtors said imposing the restrictions earlier is its top legislative priority, and the idea is supported by Americans for Prosperity, the anti-tax group backed by billionaire political donors Charles and David Koch.

"We feel like property taxes have been a problem for a long time," said Luke Bell, a vice president and lobbyist for the real estate group.

Meanwhile, groups representing city and county officials plan to ask legislators to repeal the restrictions before they take effect.

"They have their hands full trying to balance their own budget," said Cindy Green, deputy director and lobbyist for the League of Kansas Municipalities, referring to the state's ongoing financial problems. "Leave us be."

Under the law passed last year, starting in 2018, cities and counties will need voters' approval to spend an increase in property tax revenues above the rate of inflation as measured by the consumer price index. There will be some exceptions, including spending to cover bond payments, finance new infrastructure, improve roads, or pay legal judgments.

If voters don't allow cities and counties to spend the extra revenue, they'll have to drop their property tax levies.

Supporters of the restrictions note that local property tax levies have risen across the state by an average of nearly 8 percent from 2008 through 2014 and by more than 10 percent in rural areas, according to state Department of Revenue figures. Property values also grow, compounding the effect on taxpayers from higher levies, and across the state, they rose on average nearly 5 percent during the same period.

State officials have attempted to limit local property taxes on and off for decades, but legislators repealed the last law limiting them in 1999.

"Giving Kansans a chance to vote before their property taxes are increased is a wonderful idea," House Speaker Ray Merrick, a Stilwell Republican, said in a statement. "From what I've heard from voters, it has widespread taxpayer support."

But many local officials blame the state for increasing pressure on them to boost local property tax levies to cover ongoing costs and maintain services.

The state has slashed aid to local governments and eliminated local property taxes on new business machinery and equipment, shifting the burden to other taxpayers. It also is phasing out a mortgage registration tax in favor of lesser fees to counties from borrowers.

"I get a little tired of hearing about those bad cities and counties who can't keep property taxes under control," said Randall Allen, executive director of the Kansas Association of Counties. Critics of the property tax restrictions also contend that the state is infringing on the power of locally elected officials to manage local affairs.

Critics also note that legislators didn't face a similar requirement for a public vote when Republicans boosted sales and cigarette taxes last year to avert a state budget deficit. Kansas has struggled to balance its budget since Republican lawmakers cut personal income taxes in 2012 and 2013 at GOP Gov. Sam Brownback's urging in an effort to stimulate the economy.

"It seems like there's a double standard," Allen said.

But LaTurner said submitting budget questions to local voters represents "the ultimate local control."

"Some of the local governments seem to not trust their local voters," LaTurner. "If they have a meaningful project that they need to invest in or a need to increase property taxes, you'll see voters respond to that."

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