Kansas Democrats push property tax relief as alternative to GOP’s ‘political extortion’

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TOPEKA — As House Democrats unveiled a proposal to save homeowners $500 million on property taxes, House Minority Leader Vic Miller brayed at GOP leaders who play “stupid games” to try to secure income tax cuts that primarily favor the wealthiest Kansans.

Miller, a Topeka Democrat, accused Republican leaders of deploying “bogus” objections and forcing votes on “gotcha” bills. He double-dog dared House Speaker Dan Hawkins to try to repeal a property tax relief program that has been in statute since 1937 but has been defunded for the past 20 years.

And he said he won’t give in to “political extortion.”

“I’m very fearful that the Republican leadership will play the same stupid games that they always play that result in no benefit to anyone,” Miller said. “But I would love to have these things out on the floor for a straight-up vote, where members get to do what they want, and aren’t extorted into doing the only thing that leadership gives them a choice (to vote on). I’d love to see a straight-up debate.”

Members of both parties are eager to slash taxes in the upcoming legislative session in light of a projected $2 billion surplus in the state coffers.

Masterson and Hawkins, backed by special interest groups like Americans for Prosperity, have tried to adopt tax relief in the form of a “flat tax.” Their proposal in the past session would have slashed the tax rate for the top income bracket and offered modest relief for lower brackets. About 43% of the tax savings would go to the 3% of Kansans who earn more than $250,000 a year.

Earlier this week, Republican promised to deliver unspecified tax cuts next year.

Democrats responded Tuesday by unveiling a package of tax cuts tailored for residential property owners. Their ideas are to revive and refine the Local Ad Valorem Tax Reduction Fund, raise the exemption on the statewide mill levy from $42,000 to $100,000, and place a constitutional amendment before voters that would shift the tax burden from homeowners to other types of property. Miller said the package would total about $500 million in savings on property tax bills.

Miller displayed a pie chart that showed how the property tax burden has shifted over the past 30 years. Homeowners used to pay about 35% of overall property taxes. Now they pay about 54%, Miller said. The proposed constitutional amendment aims to reverse that trend.

“For the nerds out there,” as Miller put it, the Local Ad Valorem Tax Reduction Fund requires the state to set aside 3.63% of sales tax collections and divide the money among counties through a formula based on population and assessed property tax value. The program was put into state law in 1937 and remained in effect through 2003.

Hawkins, in a misleading statement offered without evidence, said earlier this year that local governments had simply used the money intended for property tax relief as a “slush fund.” Miller called it a “bogus objection,” and said the Democrats have a solution: Revise the program so that the money is deducted in the form of a rebate from individual homeowners’ property tax bills. This idea would reduce property taxes by $130 million statewide, he said.

Miller challenged Hawkins to make good on his threat to repeal the LAVTR from state statute.

“Put that out on the floor for a vote. We’ll see how popular that idea is,” Miller said. “In fact, you can put this in writing so he hears it before his listening tour later this week: I dare him to introduce that proposal. I double dog dare him. How’s that?”

Rep. Mike Amyx, D-Lawrence, appears at a Nov. 11, 2023, news conference at the Statehouse in Topeka to promote property tax relief.
Rep. Mike Amyx, D-Lawrence, appears at a Nov. 11, 2023, news conference at the Statehouse in Topeka to promote property tax relief. (Sherman Smith/Kansas Reflector)

Legislative panel’s priorities

The House and Senate tax committee concluded a series of meetings this fall by recommending the 2024 Legislature work on a proposed constitutional amendment that would forbid counties from raising assessments on real property in Kansas by more than 4% each year. The Senate passed the amendment in April, but the House didn’t reciprocate. Before implementation, it also would have to be approved by a majority of Kansas voters on a statewide ballot.

Chairman Adam Smith, a House Republican from Weskan, said the Legislature needed to restrain assessment valuation increases that fed into escalating property taxes.

“To read the temperature of the committee, I think there’s significant motivation to do something at the valuation level,” he said.

Sen. Tom Holland, D-Baldwin City, urged colleagues on the committee to concentrate during the upcoming session on residential property tax relief. The constitutional amendment favored by the Senate — Concurrent Resolution 1611 — was too broad because it delved into residential, commercial and agriculture property. The tax interests of businesses and farmers were well represented by lobbyists at the Capitol, he said, but not homeowners.

“I’m not sure who is really advocating for Joe and Jane Homeowner,” Holland said.

Wichita Rep. Tom Sawyer, another Democrat on the interim tax committee, said his constituents routinely complained about high property taxes while few seemed irritated by income tax rates.

He said the Legislature should examine potential of earmarking state general fund dollars to reduce the statewide property tax levy providing funds for K-12 public schools.

The interim tax committee agreed to ask the Legislature to consider granting a sales tax exemption to all 501(c)(3) nonprofits in Kansas. It would cost the state treasury about $34 million annually if each of 14,000 organizations made use of the exemption. Under current state law, nonprofits individually petition the Legislature for an exemption.

The committee suggested lawmakers consider introducing legislation giving cities and counties comparable authority to dictate local sales tax rates. Under current state law, counties have the potential to impose a 1% general sales tax. Yet, cities in Kansas can establish a 2% general sales tax.

“These are local issues,” said Rep. Mike Amyx, a Lawrence Democrat. “They need to be handled back home.”

Sen. Caryn Tyson, a Parker Republican and chairwoman of the Senate’s tax committee, joined with her interim committee peers in support of a call for the Legislature to assume greater oversight of tax credits issued as economic development incentives. She said companies making use of publicly financed incentives ought to be more transparent with the Legislature.

The panel also proposed that all tax bills flow through the respective House and Senate tax committees, a procedural move that would address concern about other legislative committees effectively maneuvering around tax committee opposition.

House Minority Leader Vic Miller, a Topeka Democrat, produces a pie chart during a Nov. 11, 2023, news conference at the Statehouse in Topeka. The chart shows how the overall property tax burden has shifted to homeowners.
 House Minority Leader Vic Miller, a Topeka Democrat, produces a pie chart during a Nov. 11, 2023, news conference at the Statehouse in Topeka. The chart shows how the overall property tax burden has shifted to homeowners. (Sherman Smith/Kansas Reflector)

Political extortion

Miller cautioned that Republican leaders would again try to bundle various tax cut proposals into a single bill, presented late at night in the final hours of the session, with no chance to amend the package.

He said he won’t give in to “political extortion — which is what I see Republican coming up with, with their so-called flat tax.”

The House and Senate passed a tax package that included $330 million in income tax cuts, $40 million in property tax relief, and $40 million for corporations. Gov. Laura Kelly vetoed the bill, and the Senate failed to override her veto with the support of two-thirds of the 40-member chamber.

The income tax cuts would have disproportionately benefited the highest wage earners, and most of the corporate tax cuts would have gone to out-of-state shareholders.

“The trickle down thing? It’s been debunked over and over,” Miller said. “If you’re going to give tax relief, and you want to spur the economy, give it to the people who make the least amount, not the people who make the most.”

If the Democrats’ property tax package were isolated and put to a vote, it would pass, Miller said. But he said GOP leaders are “afraid” to do that.

“They won’t have a gotcha bill that the governor has to veto,” Miller said. “They’ll have a bill that is so good, she’ll have no choice but to sign it, and they’re afraid she’ll get credit, or they’re afraid Democrats will get some credit for doing something the right way. So they conjure up this process.”

Kansas Reflector is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Kansas Reflector maintains editorial independence. Contact Editor Sherman Smith for questions: info@kansasreflector.com. Follow Kansas Reflector on Facebook and Twitter.

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