By Morgan Chilson, Kansas Reflector
TOPEKA — The Kansas Senate passed a resolution Wednesday to cap property valuation increases at 3%, the first step toward achieving a constitutional change that would need to be approved by voters.
An amendment to the constitution must be approved by a majority of voters after passing both legislative chambers by a two-thirds majority.
Senate Concurrent Resolution 1616, which passed the Senate 30-10, stops assessed values of real property from increasing more than 3% per year except in certain situations, such as new construction or if improvements occurred on the property.
If approved by voters, the cap would go into effect Jan. 1, 2027. Values of current homes would be set at 3% above 2022 valuations.
Opponents to the resolution argued that addressing one factor — in this case, the assessed valuation —- may or may not lower a homeowner’s property taxes. They expressed concern the issue may confuse taxpayers, who may vote in favor of the resolution and expect to see their property taxes decrease.
Sen. Pat Pettey, a Democrat who was a former commissioner in Kansas City, Kansas, said the resolution wouldn’t lower property taxes.
“Only mill levies can do that,” she said.
Mill levies are the assessment of $1 of tax per $1,000 of the property valuation. Local governments set mill levies based on their total valuations and the dollars needed to fund their budgets.
Local governments wishing to continue to provide their current level of services will immediately consider raising the mill levies, which determine property tax, Pettey said.
She said numerous opponents testified against the bill in committee, including the city of Mission, the city of Overland Park, the Kansas Realtors Association, the Kansas Livestock Association, the Kansas Building Industry Association and the Kansas Farm Bureau.
“So a vast, diverse group of organizations came out in opposition because they believe, and I do, that this does not reduce or limit property tax increases and could more than likely result in a shift of property tax burden across taxpayers,” Pettey said.
Sen. Cindy Holscher, an Overland Park Democrat who is running for governor, said her concern with the resolution is that property taxes are the primary funding for local governments.
“Essentially, we have to take into consideration that services for local police departments, local roads, those costs aren’t going to decrease or disappear,” Holscher said. “The funds have to come from somewhere else.”
Holscher also raised concerns that capping property valuations would, over time, cause automobile taxes to rise because local governments would need to replace funding.
“Sixty-four percent of adults typically own homes. In Kansas, 74% own vehicles,” she said. “We’re effectively switching and removing the tax burden from property owners to car owners, some of whom don’t own property. We’re squeezing the balloons, so to speak, because again, the money has to come from somewhere to pay for these services.”
Proponents of the resolution said Kansas must provide property tax relief, especially for older Kansans on fixed incomes who see their property taxes jump higher every year.
“Property taxes are not just numbers on a statement,” said Sen. Craig Bowser, R-Holton. “They’re grocery money. They’re car payments. They’re retirement savings, and they’re the difference between potentially staying in your home or being forced to sell.”
He said Kansans have seen their property valuations “rise sharply,” financially straining people on fixed incomes, young families and farmers and ranchers.
“It does not eliminate property taxes. It does not strip local governments of funding,” Bowser said. “What it does is provide stability, predictability and protection against sudden spikes in tax bills. This is about fairness. When market values surge 10, 15, even 20% in a single year, taxpayers are hit with increases they cannot control.”
SCR 1616 will move to the House for consideration. If it passes there, it would be placed on a special election ballot on Aug. 4.
In local governments, each entity, such as police and fire departments and the county commissioners, create a budget. Officials take the total assessed value of the jurisdiction — the total assessment of all property values — and determine what the mill levy needs to be to raise the dollars to meet the budget.
A mill is equal to $1 for every $1,000 of assessed property value. For example, if a house has assessed value of $150,000, the homeowner would pay $15 in property tax per mill levied by the county. In the city of Shawee, for instance, the mill levy includes funding needs for several taxing authorities, such as school districts and the local library.
Excluding school districts, which vary based on the resident’s location, the mill levy was 56.998. On the $150,000 assessed value, the homeowner would pay $854.97 annually in property taxes. (Remember, this doesn’t include mill levies for schools, which ranged from 51 mills to 63 mills.)
Capping property valuations only makes a difference if mill levies don’t change.
If the local government doesn’t have other revenue options — such as sales tax or bed tax income — they may decide to increase the mill levy to meet budget demands. States with significant tourism, for instance, often have lower property tax values because they can rely on other revenue streams.
