The Property Tax Transparency Act proposed last week by Gov. Sam Brownback and GOP legislative leaders neatly addresses their political problem of having slashed income taxes last spring while doing nothing about property taxes, which are the taxes Kansans really hate. But it also looks like another move by the state to make things harder for cities and counties.
The proposal would require their property-tax mill levies to be automatically lowered as property valuations go up.
“The goal is to bring some accountability and transparency to property taxes, but without mandating anything to the local units of government,” state Rep. Steve Brunk, R-Wichita, told The Eagle editorial board Monday.
Last week state Sen. Susan Wagle, R-Wichita, said it would still give “local units of government flexibility to increase property taxes if they need more tax money. They just have to vote for it publicly.”
But that only sounds simple.
In reality, locals’ fear of the political consequences of such votes likely would be too great a deterrent: They would sooner cut than vote.
At least the year-to-year comparison would not include property-tax revenue increases due to new construction or gains in personal property, and, according to Brunk, current laws would exclude school districts and community colleges from this new rule.
Local leaders arguably invited such meddling, because so many spent the increased revenues they saw during the years of rising assessed property valuations, rather than keep spending flat and lower their mill levies accordingly. Some boasted year after year about holding their mill levy flat, while higher valuations delivered more and more revenue for them to use as they wished.
For the property owner, a property-tax hike is a property-tax hike, whether driven by a higher assessed valuation or a mill levy increase.
But cities and counties also had seen the state fail to deliver on millions of dollars of promised annual revenue sharing, as it off-loaded spending obligations on them.
The state proposal, to be introduced in the 2013 legislative session, seems especially punitive now. That’s because it follows several years during which flat or lower valuations and declining revenues have hampered local governments’ ability to cover their obligations. It finds counties, for example, spending more to cover costs of implementing the state’s new vehicle-registration software.
It also comes after the passage of Brownback’s income-tax cuts, which are projected to create a revenue shortfall at the state level and likely to force more cuts and funding responsibility to the local level.
The reference to “transparency” also strikes some as redundant, given that cities and counties already must publicize and hold public hearings and votes on their annual budgets.
Anything designed to hold down property taxes will play well with most Kansans, and the Property Tax Transparency Act could breeze through what’s expected to be a newly conservative Legislature. But it could have unpleasant consequences for cities and counties, and the residents who rely on their services.