TOPEKA – A Leawood lawmaker’s proposal that would dramatically increase property taxes on Kansas agricultural land has spawned strong rural backlash and nagging fears that pieces of it will pop up in legislation to close a state budget shortfall.
Sen. Jeff Melcher, a Leawood Republican, argues that agricultural land is valued for tax purposes so far below market values that it’s unfair to other businesses and homeowners. He also contends the state is losing millions of dollars for public schools and local communities are being robbed of millions of dollars more for services.
“Because the farmers aren’t paying, their neighbors are picking up the tab,” Melcher said.
But farmers and agriculture groups see the eye-popping numbers for potential tax increases from the proposal, which would change how government appraisers determine the land’s potential for income.
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The Kansas Department of Revenue estimates the state would collect an additional $173 million in property taxes, while counties, school districts and local communities would take in an additional $717 million, a total annual increase on agricultural land of $890 million. Increases would vary county to county and by the type of land, and owners would see an average statewide property tax increase of 569 percent on each irrigated acre.
The chairmen of the House and Senate tax committees, not rural lawmakers themselves, are skeptical of the measure, and the Senate committee hasn’t scheduled a hearing. But even introducing such a proposal would have been unthinkable in the past in such a rural state.
“I don’t think the bill stands a chance in hell of passing, but just the fact they are trying shows that we have lost some of our standing within the state of Kansas in regards to the politics of Kansas,” said Donn Teske, who farms 1,500 acres near Wheaton in northeast Kansas and serves as president of the Kansas Farmers Union.
Kansas Agriculture Secretary Jackie McClaskey wrote in a letter to the editor for various newspapers last week that Melcher’s proposal would be “devastating” to agriculture and rural communities.
Johnson County Appraiser Paul Welcome said the change probably wouldn’t much affect developers who claim an agricultural value on undeveloped parcels for tax purposes. But, he said, the change would be “huge” for the owner of a farm in a suburban area “still hanging on while you’ve got development going around it.”
The GOP-dominated Legislature must close a projected budget deficit of nearly $600 million for the fiscal year beginning July 1.
The shortfall arose after lawmakers aggressively cut income taxes in 2012 and 2013 at Republican Gov. Sam Brownback’s urging to stimulate the economy. One policy exempted 53,000 farmers from income taxes, along with the owners of 281,000 other businesses.
Revenue-raising proposals are proliferating.
Brownback proposed increasing tobacco and alcohol taxes, and the Senate tax committee introduced a bill to eliminate a state sales tax exemption for farm machinery purchases, something that would cost farmers $73 million a year.
Kansas Farm Bureau lobbyist Ryan Flickner said his group worries that parts of Melcher’s proposal will end up in a tax bill in late April or May, when lawmakers are trying to wrap up their business for the year.
Melcher had the Senate budget committee sponsor his proposal, which exempts it from any legislative deadlines. And, even if his proposal doesn’t get traction this year, he’s promising to keep raising the issue.
“Anybody that owns a home out in rural Kansas or anybody that owns a business is shouldering the majority of the burden for funding government there,” Melcher said.