The Kansas House of Representatives is once again trying to strip transparency from the Kansas property tax system by voting to forward a bill to the Kansas Senate that would strip revenue-neutral provisions from state law.
Known as “Truth in Taxation,” or “revenue-neutral,” the law requires counties, local governments, school districts, and other taxing entities to hold a hearing and vote on any increase in property taxes over the previous year.
Last year, the transparency law encouraged 62% of all taxing jurisdictions not to raise property taxes. Another 13% of local jurisdictions imposed an increase of less than 3%.
HB2745 would, theoretically, put a 3% cap on annual property tax increases — but exemptions for new construction and debt service make the actual cap closer to 5%.
Any increase over the cap would automatically trigger requirements to put the increase on the ballot.
HB 2745, as originally introduced, would:
- Repeal the revenue-neutral provisions that prompted 49 counties, 271 cities, and a few dozen school districts to not raise property taxes last year.
- Create a new $60 million fund to send bonus checks to cities and counties that increase property taxes no more than an effective rate of about 5%.
- Require an election for voters to approve tax increases above 3%, plus taxes on new construction.
- School districts, which consume nearly half of all the property taxes Kansans pay, are exempt from the protest petition.
However, as passed, the bill strips the bonus check fund and cuts the protest petition requirements from 10% of voters in the taxing entity’s last election to only 5% of those who voted in the Secretary of State election.
Republican Rep. Kristi Williams presented the amendment to remove the bonus check fund, saying it was “unaffordable.”
“If you look at our fiscal year 2027, you will note that we are bringing in about $10.1 billion but expenditures are $10.8 billion even after consensus revenue estimate adjustments in April,” she said. “We’re still looking at a very bleak situation where we’re spending probably upwards of $500 million more than we’re bringing in. That’s just simply not sustainable.”
Williams noted that the Legislature a few years ago voted to eliminate the 1.5 mills of property tax levied by the state — which comes to about $81 million — and the $60 million bonus fund would be on top of the $81 million reduction. Moreover, that $60 million was not just a one time expense, but was to be funded yearly — with a two percent increase yearly.
The House voted 75-35 to adopt the amendment.
The original vote by the “committee of the whole” on Wednesday passed 87-22, but the final vote Thursday morning shifted somewhat and heads to the Kansas Senate after passing 76-45.
HB 2745 replaces revenue-neutral with a protest petition, meaning taxpayers would not be notified in advance of proposed increases or the actual amount of the increase. Further, protest petition notices would only be placed in a newspaper, whereas revenue-neutral notices are mailed to taxpayers.
The Senate Assessment and Taxation Committee will take testimony on HB 2745 on March 3 and March 4.
