For the third year in a row, the Kansas State Senate is considering an amendment to the Kansas constitution that would limit the increase in real estate valuation for property tax purposes.
The resolution, Senate Concurrent Resolution 1603, would limit the annual valuation increase of real property and mobile homes to 3%.
The Senate Committee on Assessment and Valuation last week heard testimony for approximately two hours.
Kansas Policy Institute CEO Dave Trabert spoke in favor of the amendment, noting that property taxes in Kansas have increased exponentially for years. KPI owns The Sentinel.
Trabert said that — from 1997 through 2023, the last year for which numbers are available — taxes on residential properties in Kansas have increased 342%, and overall real estate taxes are up 296%. Over the same time period inflation has increased 80%.
Additionally, Trabert said the amendment is needed because residential property owners have had an increasingly large share of the burden shifted onto them.
“In 1997, residential property paid 39% of the property tax; now it pays 55%,” Trabert said.
Trabert noted in his written testimony that in 2022 and 2023, many counties saw double-digit valuation increases—some, like Anderson, Linn, and Wyandotte counties, more than 40% over two years.
“Most of those counties lost population over that period, but population loss is only part of the story,” Trabert wrote. “Some counties that gained population still suffered economic loss from people moving away. Johnson County, for example, had a net loss of $400 million in adjusted gross income from domestic migration, according to the IRS.”
Other proponents included Senator Mike Thompson, the Kansas Biofuels Association, Leavenworth County Commissioner Mike Stieben, the City of Basehor, and multiple Kansas residents. Neutral testimony came from the Kansas Chamber, Kansas Manufactured Housing Association, Kansas County Appraisers, the League of Kansas Municipalities, and Senator Kenny Titus.
Voters strongly support a real estate assessment valuation limit
Kansas voters overwhelmingly support such an amendment.
A recent public opinion poll conducted by SurveyUSA on behalf of Kansas Policy Institute shows strong support for a valuation limit, with 64% of voters in favor and only 18% opposed. Support is consistent across all geographic and ideological perspectives.
The survey was conducted in December 2024 and has a credibility interval of ±4.1 percentage points.
School lobbyists and some business interests are opposed
The Kansas Association of School Boards and the Kansas National Education Association opposed the resolution in written testimony, suggesting that limiting valuation increases would impact school funding.
“Kansas NEA opposes changes in tax policy that would negatively impact the stability of state and local budgets in a way that would prevent constitutional funding of the public school system. This resolution could have a negative impact on public schools by setting artificial caps on property values that are used in calculating the local option budget,” KNEA Director of Government Relations and Legislative Affairs Timothy R. Graham said. “This resolution doesn’t guarantee property tax relief and could have the effect of forcing some local entities to raise the mill levy to ensure status quo funding. Capping the evaluation rate of property could also lead policy makers (sic) to be forced to raise rates on other sources of revenue like sales or income tax.”
KNEA’s claim about schools not being constitutionally funded is not true, however. School funding is based on a formula that is not impacted by any change in property valuation or the amount of property taxes collected; schools will still receive all the money due them based on the funding formula.
The Kansas Farm Bureau also opposed the amendment, citing concerns that it would simply shift the burden from residential to agricultural property.
“Kansas Farm Bureau (KFB) has been advocating for lower property taxes for years. KFB policy supports a ‘fair, just, and equitable tax system that is not detrimental to production agriculture,'” John Donely of KFB wrote. “While the proponents of this constitutional amendment are attempting to reduce property taxes, this amendment misses the mark. This amendment could potentially reduce property taxes for certain classes of property on certain years when the appraised value of that property exceeds 3%; however, this truly only shifts the burden to other classes of property that have not exceeded an arbitrary percentage. This is a tax shift, not tax relief.”
Tax increases should be lower with valuation limits
Donley is correct that the amendment will not reduce taxes, but it will likely result in taxes increasing at a much lower rate than in recent years.
The adjacent table from Trabert’s testimony shows that a 15% valuation increase typically results in about a 13% tax increase after local elected officials reduce the mill rate by about 1%. To achieve the same 13% tax increase with a 3% valuation limit, however, elected officials would have to raise the mill rate by more than 10%, and after years of (falsely) equating changes in mill rates with tax changes, Traber said a 10% mill rate increase is very unlikely. They would likely increase the mill rate but by a much lower amount, and taxpayers would likely pay less than if they would without the limit on assessed valuation.
Concern about tax burden shift to farmland and commercial real estate
KFB, the Kansas Livestock Association, and the Kansas Chamber of Commerce expressed concern that their members may end up shouldering a larger share of the tax burden, but those taxpayers have seen their share of the property tax burden decline while residential property owners are paying a much larger share of property taxes.
Between 1997 and 2023, the share of taxes paid by residential property jumped from about 39% to 55%. The tax share paid by the combination of the Ag Land and Ag Improvements categories dropped from 7.6% to 7%, and the total share of Commercial and Industrial categories (real estate and Machinery & Equipment) fell from about 29% to about 24%.
The decline in the tax burden for Commercial and Industrial property mostly results from a 2006 change that exempts new machinery and equipment from property tax; some tax is still paid on pre-2006 equipment still in use.
Ag Land is assessed on an 8-year rolling average of net income to reflect changes in commodity prices, drought, and other factors. The chart below shows periods of sharp declines and valuation spikes (blue line) and how values would have changed at 3% per year (orange line). Ag Land retains the 8-year rolling average under the proposal, and the constitutional amendment provides an additional benefit. The shaded periods on the chart are years when values would have been much lower for tax purposes with a 3% cap.
For example, the taxable value jumped by 17% in 2014 and increased by 16% in 2015 (ironically, when commodity prices tumbled). With the proposed constitutional amendment, the increases would have been limited to 3%, and the cumulative impact would have saved farmers tens of millions of dollars since 1997, even allowing for higher mill rates.
Ag Land interests are concerned about paying more than they would without the assessment limit because local elected officials would impose higher mill rates, but Trabert says they should still be better off with the limit because of the cumulative effect of avoiding double-digit increases.
The Senate Committee on Assessment and Taxation may later this week consider whether to recommend the bill for the full Senate to pass.
