Wallace County homeowner Imtiaz Stephen was shocked to open his property tax notice to see that he owes almost $12,000 on property appraised at $439,000. The effective tax rate of 2.7% (tax owed divided by appraised value) is among the highest in the nation and well above the national rural average of 1.2%, according to the Lincoln Institute of Land Policy (Lincoln).
The Lincoln study’s rural analysis includes county seats with populations between 2,500 and 10,000 in nonmetropolitan counties; in Kansas, the largest is Iola in Allen County. The adjacent table shows the results for Kansas and neighboring states for a home appraised at $300,000.
Kansas ranks fifth (highest) nationally, with homeowners paying $6,127 for an effective tax rate of 2.04%, and Nebraska is #6, with a tax just shy of $6,000. The other nearby states are much more favorable, with effective tax rates below 1%. A homeowner in Walsenburg, Colorado, for example, would pay only $1,722, compared with more than $6,000 in Kansas.
Stephan and his wife recently purchased the home, and their tax bill is more than double what the previous owner paid. Most of the increase is attributable to the home being appraised at a much lower value than the amount paid. Still, Stephen says an effective tax rate of 2.7% is “a financial burden that few families in a rural county of 1,500 people can sustain.”
One reason that taxpayers in less populated areas pay higher effective tax rates than urban taxpayers is that there is less property to tax. For example, one mill of property tax generates approximately $40,000 in Wallace County, compared with $773,000 in Reno County. The other factor is spending: the more a county chooses to spend on services, the more it must tax.
An analysis of per-capita spending by the 26 Kansas counties with populations below 3,000 shows multiple opportunities for more efficient spending.
Greeley County, for example, spends the most per resident, at $9,865, whereas Edwards County spends the least, at $2,546 per resident. Three counties – Chase, Stanton, and Wallace – spend more than $5,000 per resident. The median across all 26 counties is $3,724.
Greeley County’s budget shows spending only for Employee Benefits and General/Administration, and other budgeting irregularities can skew comparisons of departmental expenditures. For example, Kiowa County allocates employee benefits to each department rather than to an Employee Benefit Fund, as in other counties.
Excluding Greeley and Kiowa counties, Clark County spends the most on employee benefits per resident ($890), and Gove, Hodgeman, and Jewell are not far behind. The least per-resident spending on employee benefits occurs in Wichita and Wallace counties ($179 and $201, respectively).
Sheriff is another category with a wide range from high to low. Kiowa County spends the most at $809 per resident; Wallace County is the next highest at $633. The median is $247, and Stanton County has just $97 per resident in the budget.
Kansas Policy Institute CEO Dave Trabert, who presented the analysis in testimony before the Special Committee on Taxation, says county commissioners could reduce property taxes by spending more efficiently.
“Accounting differences and unique circumstances are factors to consider, but there are significant opportunities to reduce costs given that some counties with relatively similar populations spend two to four times as much providing the same services.”
Unaffordable property tax has devastating economic consequences
Kansas has long had some of the highest property taxes in the region, prompting a growing chorus of residents saying they are being taxed out of their homes. For some businesses, a high property tax bill is the final straw that causes them to close.
Business owner and consultant Eric Estes shared several anecdotes at a legislative tax hearing about the devastating impacts that rising property assessments can have on businesses large and small.
“So, my friend had to close his store in Hutchinson, Kansas,” Estes said. He closed it, and I asked him for permission (to speak about it). He said I could use the name of his brand, Five Guys Burgers, and he closed it because he got a tax bill for $68,000 on his Five Guys and $20,000 on another business, and he said that was the entire profit for the year. So he shelled that LLC. We lost Target in Reno County, we lost Panera Bread, a friend of mine in Manhattan. We lost a great John Deere dealer. You just lost a dealership in Lawrence, Kansas, and Douglas County. That was a massive tax bill.”
The Kansas House and Senate each passed a constitutional amendment to limit the increase of assessed values in the 2025 session, but were unable to resolve differences before the session ended. Sources indicate they are optimistic that an assessment limit can pass next year and that voters may be granted veto power over excessive tax collections.
