Dan Hawkins: Kansans should look to local government for needed property tax relief | Opinion
Property taxes are the most hated tax. Action must be taken to relieve this burden that’s pricing Kansas seniors out of their homes and low to middle-income folks out of the housing market. As speaker of the Kansas House of Representatives, I commit to helping where we can as state legislators. There’s a lot of buzz out there about different approaches to lowering property taxes, but it’s important to understand the different taxing roles played by state and local governments.
In Kansas, the state controls only 21.5 mills in the property tax equation. The remainder of property taxes is levied at the local government level, and each entity can assess and collect taxes differently. It can get complicated, but essentially, different taxing entities within each county set their operating budgets each fiscal year, and that determines the amount of tax dollars they need to collect. Entities such as counties, school districts, water districts, community colleges and so on adjust their taxation accordingly to get to their desired budget numbers.
Since most property taxes occur at the local level, let’s start with a local history lesson. Maybe you’ve heard rumblings about reinstating funding to the LAVTR or Local Ad Valorem Tax Reduction Fund. The LAVTR was a previous state-level attempt at property tax relief that transferred money from the state budget to the counties. The intention was that counties would use those funds to lower property taxes. However, that’s not what happened, and property taxes actually rose at a higher rate when LAVTR was funded than when it wasn’t. In fact, during the last five years LAVTR was funded, counties increased their property tax revenue on average by 7.6% compared to “just” 3.9% without LAVTR. Because there are no “teeth” that require LAVTR to go toward lowering property taxes, that transferred money often ended up as a government slush fund instead of a vehicle for property tax relief. This is an especially big deal because the vast majority of property taxation occurs at the local level. If we’re truly focused on property tax relief, we must ensure it goes directly back to Kansas taxpayers. Otherwise, what’s the point?
Recently, the Legislature enacted “Truth in Taxation” legislation to bring more transparency to how mill levies work within local government taxing entities. While legislators can’t control whether local governments choose to raise or lower property taxes, there is some relief we can provide at the state level. The best and most reliable way to do that is by trimming a couple of mills off the state’s 21.5 mills and backfilling, in statute, the funding commitment to our schools from the state’s general fund. School funding would not change at all with this approach, and lower property taxes plus good schools work together to make Kansas a more desirable place to live, work and retire.
After legislators help where we can by trimming the state’s mills, more must be done to reduce the property tax burden on Kansans. Because the vast majority of property taxation occurs locally, the ball is truly in each local government’s court to do its part as well. I challenge them to take a harder look at cost-cutting measures that will provide the real property tax relief Kansans need. I consistently hear stories of out-of-control property taxes costing Kansas retirees more than what they paid for their homes initially. Families are being squeezed out of the Kansas housing market due to high property taxes. House Republicans are committed to doing our part to ease the property tax burden, and Kansas residents are counting on local governments to do the same.