Three Wichita-area state senators on Monday introduced a second bill to relieve property taxes on Kansans who lose their homes to tornados and other disasters.
The Senate version seeks to accomplish the same overall goal as a House bill that went to hearing Monday – but the two bills take a substantially different approach to the problem.
Senate Bill 165 was introduced by Sens. Mike Petersen and Michael O’Donnell, both Wichita Republicans, and Sen. Oletha Faust-Goudeau, a Wichita Democrat. It would allow county commissioners to decide whether to collect taxes after a home or business is “destroyed or substantially destroyed due to fire, wind or other calamity.”
The House version, House Bill 2063, was introduced by Rep. Brandon Whipple, D-Wichita and Joe Edwards, R-Haysville. Their bill would compensate disaster victims by providing a state tax credit for property taxes paid after the destruction of a home in a designated disaster area.
Both bills are aimed at fixing a quirk in state law that sets the tax value of property on Jan. 1 of each year, making the property owner responsible for the full year of taxes even if the home or business is destroyed early in the year.
The issue arose after a devastating tornado ripped through areas in and around south Wichita on the night of April 14 last year. The storm destroyed 11 houses and 134 mobile homes in the Pinaire Mobile Home Park.
Damage was estimated at $146 million, enough to trigger federal aid to help local government clear debris and re-establish public services – but not enough for displaced residents to get individual federal disaster aid.
Those residents were surprised and dismayed eight months after the disaster, when they received property tax bills for their homes that had been bulldozed and hauled away to a landfill.
Tax bills ranged from $29 on an older mobile home to $3,323 on a single-family house.
While the senators and representatives agree that it’s not fair to tax people for property that no longer exists, each says their approach is the better way to rectify the problem.
Petersen and O’Donnell said if the tax is to be forgiven, it would be best not to collect it in the first place.
Petersen said it would cause extra hardship for lower-income people like the Pinaire residents to have to come up with the up-front payment and then file to get it back.
“We don’t want people going out to get payday loan after payday loan to pay their taxes,” Petersen said. “People do not have to pay first and get it back in our version.”
O’Donnell said another way the Senate bill is better than the House version is that it would make the tax relief retroactive to the beginning of 2012, which would make the Pinaire residents eligible for refunds.
Supporters of the House bill acknowledge it wouldn’t help those who lost their homes in April, including Edwards’ own brother. The Rev. Doyle Edwards, rode out the storm in the Pinaire park with his wife as their mobile home came apart around them.
But Reps. Edwards and Whipple said their bill would be better going forward into future disasters, because the tax relief would come from the state, not the county.
That would protect residents of small counties that have low population and a small tax base, where commissioners could be reluctant to grant tax relief if it would leave a big gap in their budget.
Whipple said he doesn’t think small counties hit by disaster would be able to forgo the tax income, which they’d need to pay for their own damage.
“One of the reasons our bill has been popular is it keeps the county whole,” Whipple said. “It keeps everyone whole.”
Following a hearing on House Bill 2063 on Monday, the Taxation Committee referred it to a subcommittee where it will be “tweaked a little,” Whipple said.
And although the Senate bill is different, Whipple said the important thing is that both chambers are working to provide tax relief for disaster victims.
He said he thinks both bills will pass and that a stronger law will emerge after the necessary give-and-take to reconcile the two bills into one.
“The final product will be the one that is the best for the people,” Whipple said.