The Kansas House and Senate remain divided over the structure of a constitutional amendment on an assessment limit for property tax purposes. The Senate passed SCR 1616 in February, limiting the increase to 3% annually, but the House rejected it on a voice vote last week. Yesterday, the House passed SCR 1603, based on its rolling-average concept from HCR 5011, which the Senate rejected last year.
With just a week left in the shortened legislative session, it’s impossible to predict whether Kansas taxpayers will get protection from unaffordable assessed valuation jumps despite public polling showing that 75% of voters want a fixed limit.
However, the comparative components of the competing bills make two things very clear:
- The House version does not provide the protection voters say they want and need.
- Taxpayers would be better off waiting for a new Legislature to try again next year than with the House version.
As several legislators noted in yesterday’s floor debate, taxpayers may not see any benefit from the House rolling average concept for five years. A bill passed in 2027 won’t take effect until 2028, and implementation could be delayed for several years while waiting for enough time to pass to create a multi-year average.
It’s also possible that voters would reject the rolling average method due to the many unknowns. Their message would be ‘go back and give us what we want,’ but those who oppose assessment limits would say, ‘see, voters don’t want a limit,’ giving legislators who oppose assessment limits more leverage to block future attempts to help taxpayers. That may not seem logical, but that’s how things often work in Topeka.
Voters need predictability
The primary components of the competing concepts shown below make it apparent that taxpayers are much better off with a fixed limit than a rolling average.
SCR 1616 would take effect immediately if approved by voters on the November 2026 ballot, whereas the implementation of the rolling average option remains unknown. Also, more property owners are protected by SCR 1616 because the House rolling average bill excludes ag land, vacant land, and nonprofit real estate holdings.
The transferability component of the fixed-limit SCR 1616 is a major improvement over assessment limits in other states. It avoids most fairness objections, where someone who buys a home pays taxes based on the sale price, while the next-door neighbor pays much less because the property is still protected by the limit. This also makes homebuying more affordable because the property taxes will be lower.
Also, assessed values would be rolled back to 2022 levels in SCR 1616 before the fixed limit is applied, whereas there is no rollback in the House version.
The House version contains one provision not included in the Senate version. Legislators could provide a property tax freeze for seniors so they pay the same amount of tax each year without violating the uniform and equal clause in the Constitution. Some legislators pushed that as a feature, while others said doing so would just shift the tax burden to everyone else.
Legislators could allow local governments to jack the mill rates, but they could avoid it by adopting a mill rate limit, such as the Senate Tax Committee’s amended version of HB 2745.
Calculating property tax with an assessment limit
Appraised values are not affected in either bill; only the taxable assessed values would be adjusted. The table below shows how property tax is calculated with and without a 3% limit on taxable assessed values.
Currently, a home appraised at $300,000 is taxed at 11.5% of the appraised value. One mill equals a dollar of tax for every thousand dollars of taxable assessed value, so the tax at 150 mills is $5,175 ($34,500 divided by $1,000 times 150). Each year, the taxable assessed value changes at the same rate as the appraised value. If the appraised value increases by 6% next year, the taxable assessed value is $36,570 ($318,000 times 11.5%).
However, the taxable assessed value is only $35,535 with a 3% assessment limit in SCR 1616.
If the appraised value increases in Years 3, 4, and 5 at the rates shown in the table above, the taxable assessed value without a limit is $48,574 and the tax at 150 mills is $7,286. If taxable assessed values cannot increase more than 3% each year, the taxable assessed value in Year 5 is $38,830 and the tax is $5,825, saving the homeowner $1,462.
The homeowners’ tax savings increases each year that appraised values grow more than 3%.
Homeowners pay higher property taxes with the rolling average concept
The table below compares the long-term tax implications of the two assessment limits, using a home valued at $300,000 today and taxed at 150 mills each year. We assume a 10% annual increase in appraised value, which is the current average for homes in Kansas over the last four years.
A rolling-average limit begins in Year 6, allowing five years to elapse before the average is calculated. The homeowner gets a break that year because the average is lower than the Year 5 value, but is still paying more than under the fixed limit. Between Year 6 and Year 15, taxes would total about $101,000 with the rolling average, but only about $69,000 with the fixed limit.
The fixed-limit advantage grows each year; in Year 15, the homeowner would pay $7,000 less ($14,899 vs. $7,828).
Implementing both limits in Year 6 still shows the taxpayer better off with a fixed limit, paying about $89,000 compared to $101,000 under the rolling average.
In addition to being unpredictable, the rolling average method almost encourages values to rise faster because the pain is felt in small increments rather than immediately, as it is today.
Constitutions exist to protect taxpayers, not give legislators flexibility
Several proponents of SCR 1603 said they believe a non-specific constitutional amendment is good because it gives the Legislature flexibility, while other House members believe voters would reject it because they want specifics and may not trust legislators to deliver.
Wanting flexibility is understandable, but voters want the guarantee of a specific assessed valuation limit in a constitutional amendment. Constitutional provisions exist to protect citizens and limit government, and with so many people suffering from years of unaffordable tax increases, protection from local government is the better option.
The fairness debate should focus on what’s best for most taxpayers
The issue of fairness was frequently brought up during the House debate on SCR 1603. Democrats and Republicans alike say it isn’t fair, for example, for newly built homes to be taxed at the purchase price while existing homeowners benefit from an assessment limit. (That would also apply to purchasers of existing homes under the House bill, but not in the Senate bill with its transferability feature.)
Fairness works both ways, however. Is it fair to deny property tax protection to the vast majority of taxpayers in order to avoid a fairness issue to new home buyers?
Let’s say the property tax on a newly built home is $10,000 and the average homeowner of existing comparable homes in the neighborhood is paying $7,000 after benefitting from several years of an assessment limit.
Those using the fairness objection to an assessment limit are really saying it’s better to have everyone pay $10,000 than to protect Kansans from unaffordable increases in valuation.
Is that what’s best for Kansans?
