A Bipartisan Win on Property Taxes for Kansas Taxpayers
After passing in the Kansas House and Senate by overwhelming bipartisan margins, Governor Laura Kelly, a Democrat, signed into law the “Truth in Taxation” property tax reform, which is based on ALEC model policy and the successes of Utah and Tennessee. Hardworking taxpayers in Kansas have achieved a major victory and can expect to enjoy lower property taxes and a more honest discussion around property tax burdens in the future.
Addressing the issue of excessive property tax burdens can be an extremely challenging endeavor at the state level, since the vast majority of real property taxes are levied at the local levels of government – and based on the spending levels of local governments. Looking at approaches to reduce high property tax burdens with a principled and effective long-term strategy is essential. When policy changes are implemented successfully, states can dramatically improve their economic competitiveness and remove a crushing burden from individual property owners concerned with rising property tax bills.
Before Kansas’ recent reforms, Utah and Tennessee received the most attention for their pro-taxpayer property tax transparency measures. Since its enactment in 1985, Utah’s Truth in Taxation law has helped the Beehive State maintain a low property tax burden. When the law was passed, Utah had the 24th lowest property taxes in the country, but thanks in large part to their Truth in Taxation law, Utah has improved to 14th lowest today. This has been one of the policy reforms that has kept Utah ranked first in America for best economic outlook in every edition of the Rich States, Poor States report.
Utah’s Truth in Taxation law has effectively controlled the growth of its property tax assessments and overall burdens. The law requires that citizens be notified of the intent to raise taxes and invited to a public hearing to voice concerns. This also allows local units of government to make their case if they feel additional revenue may be needed. If a local government decides they want to increase spending, the Truth in Taxation process requires local elected officials take recorded votes to authorize the new rates or assessments.
The purpose of Truth in Taxation is to provide “notification, disclosure, and the elimination of automatic property tax increases.” In describing the importance of truth in taxation, the Utah Taxpayers Association, led by former Utah Senator Howard Stephenson, put it this way: “Local governments should not receive an automatic 12% revenue increase simply because property valuations increased 12%.”
Now, Kansas has become the latest state to realize the benefits of putting taxpayers in control of the otherwise difficult policy issue of addressing harmful local property tax burdens and the byzantine property tax assessment process. As Dave Trabert, president of the Kansas Policy Institute said, “Truth in Taxation closes the property tax honesty gap. Local officials can no longer pretend to ‘hold the line’ on property taxes while taking in large increases from valuation changes. Now, they have to be honest about the entire tax increase they impose.”
Other states are likely to follow suit as they realize the incredible benefits of having a more predictable and transparent property tax system that enhances economic competitiveness. Kansas may have created the new “gold standard” model for state lawmakers throughout the country as they work to increase accountability and transparency and address escalating property tax burdens on behalf of their constituents.