Kansas Senate embraces new restrictions on local property taxes

Sen. Caryn Tyson, R-Parker, spearheaded legislation through her committee this week to alter restrictions on property tax increases for local governments. (Noah Taborda/Kansas Reflector)

TOPEKA — The Kansas Senate on Thursday passed legislation to require local governments to notify residents by mail and hold public hearings before increasing property tax collections.

The tax bill removes a controversial lid on yearly mill levy increases and instead establishes a “revenue neutral rate,” which adjusts the effective tax rate to account for increases in assessed property value. Cities and counties that fail to follow the rules will have to refund taxpayers.

Other provisions in the bill, which passed 34-1, ban counties from increasing property values as a result of normal maintenance and give treasurers the authority to offer a payment plan for property taxes.

Sen. Caryn Tyson, a Republican from Parker who spearheaded the bill through her committee in the first two days of the session, said she understands the bill represents a dramatic change to property tax policy.

“I love Kansans. I feel like they’re very reasonable people,” Tyson said. “We understand that we need roads, bridges, we want good schools. We know that takes tax dollars. So let’s just be transparent with them and tell them why the increase is coming.”

The existing tax lid ties annual mill levy increases to the consumer price index. Sen. Tom Holland, a Democrat from Baldwin City, said the problem is counties now automatically raise taxes every year just in case they ever need the extra revenue.

He supported the decision to eliminate the tax lid as part of the property tax reform.

“It gets rid of a moral hazard for taxpayers,” Holland said. “Because now I’m not worrying about if I live in an area that is stagnant or shrinking economic growth. I’m not having to worry about my local units of government grabbing that. I think that’s a big deal for taxpayers.”

Sen. John Doll, a Republican from Garden City, said the proposed tax changes won’t age well. He offered an amendment that would have revived a program to transfer $54 million in state property tax collections to local governments to avoid local property tax increases.

Instead of using a hammer, Doll said, the state should trust local governments.

“Every time we try to put a mandate on county and local government, we always seem to come back because it doesn’t age well,” Doll said. “Maybe it’s because county and local government know what they’re doing.”

Doll was the lone “no” vote on the tax plan. Four senators were absent, and Sen. Marci Francisco, D-Lawrence, passed.