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Property tax lid causing harm, Kansas cities and counties tell lawmakers

Rep. Ken Corbet, left, Sen. Caryn Tyson, and Rep. Steven Johnson, members of an interim tax committee, ask questions of officials representing city and county governments about the impact that new property tax limitations are having on local governments.

— New limits on the ability of cities and counties to raise property tax revenues from one year to the next are causing severe problems for cities and counties, officials representing local governments told an interim legislative committee Thursday, but most members of that panel appeared unmoved by those complaints.

The new law, which was passed in 2015 but is just now taking effect, is commonly known as a property tax lid because it generally caps how much of an increase in property tax revenue cities and counties can levy from one year to the next at the rate of inflation, unless they hold a public election to get voter approval.

"Our member cities are still very strongly opposed to the tax lid. We think it's an infringement on the very idea of representative democracy," said Trey Cocking, deputy director of the League of Kansas Municipalities, a group that represents city governments. "Our members were elected to make these decisions, and we obviously think these decisions are best made at the local level."

City and county governments operate their budgets on a calendar year cycle, but their budgets have to be approved in the August preceding the year they take effect.

This year, three city governments called elections to get voter approval for budgets that exceeded the tax lid limits, Cocking said. The largest of those was Onaga, in Pottawatomie County, a town of roughly 700 people. The cities of Tescott, in Ottawa County, population roughly 300, and Pretty Prairie, a town of 672 people in Reno County, also held elections.

In Onaga and Tescott, the cities sought approval for higher tax revenues to pay for road maintenance, and both of those passed, Cocking said. But the tax request in Pretty Prairie, which sought additional money for golf course maintenance, failed.

But Cocking said cities throughout Kansas are facing increased costs for things like employee health insurance, and the tax lid does not allow them to keep up with those costs.

"We are hearing from cities that, this year, have had their health care costs go up anywhere from 10 to 58 percent," he said. "The city of McPherson is facing a 10 to 13 percent increase in health care costs, and that's after they increased their deductibles by 250 percent."

Some lawmakers, however, have said the "lid" is more like a sieve because there are numerous exceptions to the rule, such as taxes that are raised to pay for enhanced law enforcement or other public safety functions, or taxes raised to pay the cost of complying with state or federal mandates.

Cocking noted, however, that one of the areas of public spending that was not excluded from the lid was taxes levied to pay for leases of public buildings. Because of that, he said, some cities, including Stockton, population 1,329, have had their bond ratings downgraded.

Rep. Ken Corbet, R-Topeka, whose district includes part of Osage County, said that county had been raising property tax revenue at rates far above the rate of inflation before the tax law took effect.

"I understand your situation with health care costs," Corbet said. "But you've got to also realize that the people who are paying those taxes, families with kids, also are paying the same increase as everybody else."

Melissa Wangemann, general counsel for the Kansas Association of Counties, said her organization also would like to see an exception for rising employee costs. A bill introduced in the House during the 2017 session would have provided that exception, she said, but that bill never made it out of committee.

"The lowest quote I have heard from my counties for health care was a 7 percent increase in 2018," she said. "This year's consumer price index — the measurement for the tax lid — was 1.4 percent."

But Sen. Caryn Tyson, R-Parker, who is also running for the 2nd District congressional seat, said she still hears from constituents on a routine basis complaining about increases in their property tax bills, and she cited Douglas County as an example, even though her Senate district does not include any portion of Douglas County.

Tyson said a person from Lawrence had emailed her, saying that person's property tax bill was going up 10.5 percent. That, however, was the combined effect of increases in city and county taxes, which are covered by the lid, as well as the Lawrence school district, which is not covered by the lid.

The committee will continue meeting Friday to review other tax issues, including the provision in the Kansas Constitution that says agricultural land is taxed according to its production value instead of its fair market value, something officials have said is a multibillion-dollar tax break for the agriculture industry.

The panel will then vote on what recommendations to include in its final report to the 2018 Legislature.

Comments

RJ Johnson

Ours went up 11%, at this rate these people are going to tax us right out of our homes!

Something has to be done NOW!

1 month, 1 week ago

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Charles L. Bloss, Jr.

Well said. Retirees who have worked all their lives to have a home to retire in, are being taxed right out of them. Happening to us now too. This has to stop.

1 month, 1 week ago

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Dorothy Hoyt-Reed

Your taxes weren't raised the value of your home was raised. It was raised in part, because of the hot retail market we have had this year. Houses near you that were sold were probably sold at or above asking prices, and probably sold fast. The good news, is your house is worth more. The bad news, there is more value to tax.

1 month, 1 week ago

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Clara Westphal

That doesn't mean it would sell for more.

Property tax is putting a strain on my budget and I have no way of earning more money. There should be some kind of exemption for older people on a limited income. It seems as though the only way the city knows of paying for all of the projects they want is to raise property taxes.

1 month, 1 week ago

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Melinda Henderson

And when that isn't enough, keep our local sales taxes too high.

1 month, 1 week ago

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Josh Berg

Yes taxes were raised. State, City, School Board, they all raised taxes this year. You love taxes so much that you do not even notice when they are raised anymore.

1 month, 1 week ago

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Bob Summers

Why would productively incompetent people in government ever have enough of your money?

But, the few tax paying public will continue to hand over more of their blood sweat and tears because they believe they need incompetent people in government to survive.

Pay up.

1 month, 1 week ago

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John Brazelton

Don't give up the property tax "lid" for local governments. They will spend you out of your homes, farms and small businesses. Government only knows one thing - How to spend your money!!! They never cut back on spending.

1 month, 1 week ago

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Larry Miller

I don't understand why requiring the people who are going to pay the tax to vote on the tax is a bad thing.

1 month, 1 week ago

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Carl Edwards

The mill levy increased in Lawrence by 4.4% from 2016 to 2017. The mill levy increases in Eudora, Baldwin, or Lecompton weren't over 2% between 2016 and 2017. This un-named Douglas County property owner cited by Sen. Tyson no doubt had an increase in property value in order to have a 10% increase in taxes.

1 month, 1 week ago

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Clara Westphal

I just looked at my property tax bill and it states an increase of 10.5%.

1 month, 1 week ago

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Jeff Plinsky

Cities have only 2 ways to raise money to pay for services - sales tax and property tax. Cities are asked to provide a variety of services that generate no income, like sewers, roads, police, firefighters, emergency medical, etc. Citizens can choose to pay for services, or not have services. People are getting elected on platforms of providing the same or more services. Which means that, as prices rise, so must the amount of tax money taken in. Or else, those services face cuts.

Retired citizens enjoy the benefits of roads, sewers, police, fire, medical, etc. Many of them live in neighborhoods where others want to live, and are willing to pay a premium for those houses. This drives housing prices up, and increases the tax liability on properties in the vicinity, unless the tax levys go down accordingly.

This is simple economics.

1 month, 1 week ago

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Clara Westphal

I do not object to paying for the services you mention. I do mind having tax money go to developers who do not need incentives to build what they wish to build but the city commission gives it to them anyway.

1 month, 1 week ago

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Josh Berg

Yes we all are okay with paying for necessary services. Simple economics is not shoving 17 million dollars of new police station down the citizens throats when they voted to not build it. Nobody will argue that we should pay some taxes for necessary utilities and services but when spending gets out of control is when we all cry foul. There is nothing wrong with a property tax lid and if some towns are unable to budget within their means then maybe it is time for some new leaders.

1 month, 1 week ago

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Tim Foley

What's causing us harm is incompetent people spending our tax money on stupid stuff, and not keeping track of who owes us money and collecting it.

1 month, 1 week ago

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Richard Heckler

What is the point in pushing inflation?

Hot housing markets usually mean inflated market values. Conservatives in Washington have a way of wrecking markets values thus leaving home owners owing more than market value will bring.

Boom markets create an illusion.

1 month, 1 week ago

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Bob Summers

It's complex critical thinking minds like yours why taxes are high.

You cannot comprehend that the "illusion" created is from the people in government taking your money.

1 month, 1 week ago

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Richard Heckler

Boom markets create an illusion and increase taxes .....

1 month, 1 week ago

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Bob Summers

Your parasitical ideology is why there are high taxes.

The more money an innocent citizen has, the more money the congenital Liberal parasites demand.

.

1 month, 1 week ago

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Bob Smith

Little piggies squeal when they want more feed in their trough.

1 month, 1 week ago

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Steve Jacob

I am conflicted. I hate raising taxes, but it should be up to the local government elected officials to decide it.

1 month, 1 week ago

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Josh Berg

Wrong, it should be up to the citizens. It is our money and we should decide how it is spent. I do not want Herbert or Soden or any of the others on our commission continuously spending frivolously. Let the people decide.

1 month, 1 week ago

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Dave Lee

hey. that tax experiment that ks tried. and failed. lets try it again on the whole of america. maybe it will work this time...

1 month, 1 week ago

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Josh Berg

Maybe if you were not ignorant you would know that they are not the same thing. There are several differences between what Kansas did and what D.C. just passed. Take your CNN talking points elsewhere.

1 month, 1 week ago

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Gary Stussie

Josh ... let's let our liberal friends have a corner on the name calling ... its all they have left!

1 month ago

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Gary Stussie

Mr. Bloss rightly points out " Retirees who have worked all their lives to have a home to retire in, are being taxed right out of them."

Most of us have paid property taxes for 40 plus years while our children and grandchildren went through the school system.

It seems equitable to freeze (not eliminate) the property tax on a person's primary residence at the level it is at the time they are eligible for full Social Security ... until they move out, sell or die. The "let's increase property value so we can collect more taxes" is a questionable process and can be very punishing to those of us retired and on a fixed income.

1 month, 1 week ago

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