Wichita, Sedgwick County urge governor to veto property tax reform bill

Wichita and Sedgwick County are sounding the alarm about a bill passed by the Legislature that would allow voters to halt local government budget increases.

The bill, HB 2745, is awaiting Gov. Laura Kelly’s desk signature or veto. The governor has not signaled where she stands on the bill.

The legislature approved the bill during the last day of the legislative session last week. If 10% of registered voters, not property owners, in a taxing jurisdiction protested, that would cap the jurisdiction’s spending at the same level as the previous year.

Local governments now rely on increases in property values to bring in more property tax money to support more spending each year. At the same time, as valuations grow, owners’ property taxes grow.

Backers of the bill in the Legislature cast it as putting taxpayers in control. House Speaker Dan Hawkins, a Wichita Republican, called it “a major step toward reining in out-of-control local spending.”

But city and county leaders said the mechanism to stop increases is convoluted and would not allow local governments to spend to keep up with growth.

“I think it’s very dicey. It gets confusing, and I think it’s, quite frankly, going to create issues for several of our offices,” Sedgwick County Lobbyist Jason Watkins said. “The Treasurer, the Clerk and the Election Commissioner are all responsible for collecting what we will call RNR protest petition signatures. So you will have multiple entities that will be receiving these protests.”

Voters could protest the increased spending in a number of ways, including through a petition and returning their revenue neutral rate notice to the county. Jurisdictions would have seven days to verify protest signatures.

“As our communities continue to grow, we need more firefighters. We’ll need more police and sheriff. We’ll need more EMS,” Watkins said. “The way 2745 is structured, you will get no ability to... spend more revenue, based on growth.”

The law could also negatively affect city and county bond ratings, increasing their interest rates to fund capital improvement projects and other bond-funded initiatives, officials said.

“We’re very aggressive in building fire and police stations, park facilities, things of that nature,” city Finance Director Mark Manning said. “We would have less capacity for all of those infrastructure improvements.”

The local governments are encouraging the governor to veto the bill, which did not pass with a veto-proof majority in either chambers.

“This is alarming, and I think ... it’s alarming because there’s been no consultation with local government on this,” City Manager Dennis Marstall said.

The legislature returns for its veto session April 9.