Fee fix — Special-interest group deal unfair to Kansas communities

3/21/2014

Kansas lawmakers have found another way to shortchange communities.

Kansas lawmakers have found another way to shortchange communities.

The Kansas Senate recently passed a bill that would phase out the state's mortgage registration fee, even though counties said it would cost them millions. The measure goes to the Kansas House, which should balk on the proposal.

The Kansas Bankers Association and Kansas Realtors Association want to end the fee established in the 1920s as a way to cover mortgage-related costs, and reduce county reliance on property taxes.

But the special-interest groups consider the fees unfair — some farm credit lenders don't charge the fee — and a deterrent to property sales.

Yet there's been no palpable outcry from Kansans seeking mortgages in the many decades of the fee.

The 0.26 percent of the amount borrowed supports the following county government functions, as required by law: efforts to validate mortgages and place liens on properties on behalf of lenders, and the cost of collecting money if a property goes into foreclosure.

Instead of having property buyers fund such mandates through a user fee, all county residents would pay as governments seek higher property taxes or cuts in services to cover lost income.

The magnitude of that toll remains uncertain.

Counties across Kansas reportedly could lose some $47 million a year in revenue, including an estimated financial hit of up to $400,000 annually in Finney County.

Changes to the original proposal could soften the blow a bit.

The mortgage registration fee would be phased out over five years. An increase in filing fees for documents handled by county registers of deeds also was added, but still wouldn't cover the lost income.

While the changes made the proposal a bit more palatable, the bill remains evidence of ultraconservative Republican state lawmakers' growing interest in giving breaks to special-interest groups at a cost to their constituents.

Unfortunately, Sen. Larry Powell, R-Garden City, and Sen. Garrett Love, R-Montezuma, voted for a plan that will penalize the counties they serve.

In doing so, they also failed to see the bill for what it is: a solution looking for a problem, and a surefire way to erase needed property tax relief.

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