Kris Kobach wants lower taxes in Kansas, and to get them, he's willing to reopen the tax angst of the Brownback era while also cutting spending.
Kobach, who officially filed to run for governor this week, is calling for changes to reappraisals that raise property taxes, a rollback of the sales tax increase signed into law by former Gov. Sam Brownback and at least a partial reversal of the 2017 rollback of Brownback’s 2012 income tax cuts.
“People are overtaxed in Kansas,” Kobach said. “And we need a conservative leadership team to solve that problem.”
Republicans and Democrats alike poked holes in Kobach’s vision of taxation in Kansas. After budget shortfalls and cuts during the later years of Brownback’s tenure, the GOP-dominated Legislature forced the 2017 tax increase into law. But the financial picture in the state remains tight.
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“It would require serious cuts all across government services,” said Rep. Tom Phillips, a Manhattan Republican who is the vice chairman of the House tax committee.
“It’s patently absurd,” said Sen. Laura Kelly, a Topeka Democrat running for governor.
It’s also unclear how much Kobach's proposals would cost, though they would likely dramatically reduce revenue to the state.
"What is he trying to accomplish?" asked Ken Kriz, a professor of public finance at the University of Illinois-Springfield who has studied Brownback’s tax cuts. "If it's economic growth, I'm not sure that anybody has done any work that shows that any of those things are related to economic growth at all."
Kobach said he’s been told that “property taxes are killing Kansans” and “driving people from the homes that they have lived in their entire lives.”
“There is a real property tax problem in Kansas,” he said.
His main issue is with reappraisals, which he called “a stealth tax hike that hit people year after year” and lacks accountability.
“The reappraisals that we all see are just like a quiet flood that just keep increasing and increasing,” Kobach said. “There’s no hubbub. There’s no big debate.”
Kobach said a “really atrocious example” is in Johnson County, where big-box retailers saw their property taxes go up an average of 85 percent in one year.
Kobach wants to change the reappraisal system in Kansas, including making a legal change to have reappraisals occur every two or three years instead of annually, along with a cap on reappraisals of 2 percent per year.
Josh Svaty, a Democratic candidate for governor and a farmer, called increases in property taxes a “kick in the gut.”
But he said “we’ve just lived through such a radical tax experiment. I think we all learned our lessons that we should not embark on an even bigger one.”
It is true that residential appraisals are up by 15 percent or more this year in parts of Johnson County, particularly in Prairie Village and other northern Johnson County communities.
But County Commission Chairman Ed Eilert said that's a function of an extremely hot real estate market, in which the demand for homes, especially under $350,000, far outweighs the supply.
"The market in Johnson County has been extremely strong in some price ranges," Eilert said. "It's my understanding generally that appraisals are to be based on comparative prices in the marketplace."
Eilert also noted that property owners who think the county's valuations are too high have the right to appeal, and many owners take advantage of that process. This year, the county considered nearly 6,700 residential appeals, and about half of those resulted in some reduction to the value.
Commercial owners can also appeal their values, and some big-box stores have appealed their valuations as too high.
Eilert defended the county's approach to valuing those big-box stores and said the county is following long-established practice for evaluating commercial property values. He said the commercial owners want their properties to be valued based on "hypothetical conditions" rather than on known facts about their physical and economic characteristics.
Governing bodies can reduce the property tax impact of rising property values by lowering their mill levies. Eilert said the County Commission expects a modest mill levy reduction again this year.
Regarding its annual residential and commercial appraisals, Eilert said Johnson County is following the process established in state law.
"The county can't take action about the appraisal process. That's up to the state Legislature," he said.
Kobach’s three tax moves, targeted at income, sales and property taxes, are the first major tax policy to be presented by any major candidate thus far in the 2018 election cycle.
Brownback's earlier tax cuts, largely ended by the 2017 tax increase, slashed income tax rates and created an income tax exemption for the owners of limited liability companies and other pass-through businesses.
Kobach said that when it comes to the 2017 tax changes, he wants to repeal the rate increase but “not necessarily the special treatment of LLCs.”
“Although that would certainly be on the table,” Kobach said.
The sales tax rate also can be brought back to the pre-2015 level, Kobach said.
Kobach said he thought all three moves were feasible, even if the makeup of the divided Kansas Legislature, which has been more moderate for the last two years, remains the same.
“I think there’s a very good argument to be made that it could be done with today’s Legislature if the governor led an effort to cut expenditures,” Kobach said. “That was the missing element of the Brownback/(Jeff) Colyer administration.”
But Kelly, a key Democratic leader in Topeka, was critical of Kobach’s vision.
“We have just lived through year after year of crisis caused by the reckless tax plan of Brownback and Colyer,” Kelly said. “For Kris Kobach to suggest that we need to go back to that and more is frightening.”
Asked about Kobach’s tax plans, Gov. Colyer’s campaign pointed to a decision Kobach made in May 2000 while serving on the Overland Park City Council when the Republican voted to recommend an excise tax increase involving new developement. The council approved a tax increase in September of that year.
“Actions speak louder than words,” Colyer spokeswoman Kara Fullmer said. “The only time Kris Kobach was in a position of authority to tax his fellow citizens, he used that power to raise taxes on the citizens of Overland Park.”
“Governor Colyer supports easing the tax burden on Kansans and looks forward to working with the Legislature to tackle this important issue,” Fullmer said.
Kobach's campaign spokeswoman said the excise tax is "not actually a tax."
"Secretary Kobach wouldn't vote for that had it been a tax increase," Kobach spokeswoman Danedri Herbert said.
She said Kobach had also voted to decrease the mill levy.
"They're just distorting Kobach's record," Herbert said. "It's kind of a weak up attempt. That's not a tax. It's a fee."