Michael Austin: It’s time to close the property tax honesty gap

There’s an honesty gap between local government and Kansans when too many Kansans are writing checks for large property tax hikes and yet are being told taxes aren’t being raised by only talking about mill rates.

For example, the City of Wichita increased property tax by 116% between 1997 and 2018, according to the Kansas Department of Revenue. And yet the mill rate only went up 5%. That huge, 111-point difference is symbolic of an honesty gap.

It reminds me of Stanford economist Walter Williams saying, “Honesty and trust are not merely matters of character and morality; they’re crucial for efficient human interaction and a smoothly working economy.”

Far too often, local officials avoid responsibility in raising property taxes. In Johnson County, officials are breaking with longstanding property tax precedent so they can tax businesses for what’s inside their buildings instead of the land they sit on or the building itself.

In Sedgwick County, officials proudly proclaim the 2020 budget won’t raise mill rates, yet don’t mention property taxes will rise roughly 20% over the next five years because of valuation increases.

This lack of honesty has been present for decades. Over the past 20 years, Kansans are paying property taxes that have grown many times faster than their ability to pay.

Recently, Governor Kelly’s Council on Tax Reform recommended Kansas lawmakers fund the Local Ad Valorem Tax Relief Fund (LAVTRF) with hopes it will lower local property taxes.

However, what Kansans may not know is that financing the LAVTR failed 15 years ago and will likely fail again. Half of the tax council members are local government officials with first-hand knowledge of local government spending habits.

County property taxes averaged 7.5% annual growth during the last five years LAVTRF was funded. Without LAVTRF, county property taxes ‘only’ averaged a 4% yearly increase. Giving state money to local government for this purpose only increases the state’s deficit and puts more pressure on sales and income tax increases. It also lessens the need for local officials to do the tough work and find ways to save taxpayer money.

The only solution is to restore trust between the government and the people. Local government gets away with raising taxes by allowing valuations to rise but never adjusting mill rates. Across the state, Kansans agree this needs to stop. According to a 2019 poll done by SurveyUSA, 75% of Kansas voters want a public vote before local officials raise their property taxes. Kansans want a say to the entire budget process, not a few spending items.

To close the honesty gap, Kansans should have itemized lists of local government spending. Their local government should compare their spending to neighbors. Kansans should ensure their local government is providing better services at a better price.

The time for nice soundbites to replace the real work in providing relief to constituents is over. Each of us must demand honesty and transparency from our local officials and ask hard questions. Local control means Kansans oversee their community government, not the other way around.