TOPEKA — Business and agriculture organizations aren’t mincing words in describing a proposal to raise state property taxes by $640 million in three years to pour cash into the unconstitutionally inadequate system of financing Kansas public schools.
Dan Murray, Kansas director of the National Federation of Independent Business, said Thursday the bill before the House Taxation Committee escalating the state’s mill levy for education from 20 mills to 38 mills by 2020 would deliver a vicious knockout punch to business.
“The annual average increase of approximately 6 mills over the next three years would be a real manifestation of the Book of Revelation’s ‘number of the beast’ for Kansas small business owners,” he said.
Steve McCloud, representing 30,000 families in the Kansas Farm Bureau, said House Bill 2740 would guarantee farm ledger books bleed red ink.
“The farmers and ranchers of Kansas cannot afford to pay ever-increasing property taxes,” McCloud said.
Kansas Chamber lobbyist Eric Stafford said the 2017 spike in the state’s income tax was bad enough. Nearly double state property taxes for education?
“This is the last thing the Kansas taxpayer should have to face. We believe Kansas must improve its tax climate if we ever hope to climb over the fence of mediocrity,” Stafford said.
Kansas’ income tax hike last year followed a robust raise in the statewide sales tax rate in 2015. Both were in response to years of budget shortfalls linked to aggressive 2012 and 2013 income tax reductions that were part of lawmakers’ experiment in supply-side economic theory.
The House’s consideration of property tax as a source of revenue reflected a Kansas Supreme Court ruling that deficiencies in state aid to K-12 districts violated the Kansas Constitution. It is unclear how much money will be necessary to satisfy the court, but some estimates exceed $600 million.
Rep. Steven Johnson, an Assaria Republican and chairman of the tax committee, said universal condemnation of the property-tax legislation was anticipated. The idea was to expose committee members to options for altering spending on schools, he said.
The House bill would raise the state property tax on a $150,000 residential property, for educational purposes, from $299 in the 2017 tax year to $400 in 2018. It would rise to $490 in 2019 and $574 in 2020.
Those are the kind of numbers that put a grimace on the face of people engaged in the residential housing market.
“This property tax increase will affect all Kansas residential property. The Kansas economy cannot afford a reduction in home sales,” said Patrick Vogelsberg, a lobbyist with the Kansas Association of Realtors.
Russell resident Andrea Krug Krauss analyzed the House’s property tax bill from the vantage point of a school board member in rural Kansas. She said a gigantic property tax hike would drive out of business people struggling with depressed prices for livestock, crops and oil.
Krauss said Russell’s schools were desperate for infrastructure upgrades that might be addressed through a modest bond issue.
“Our voters simply will not support a large school bond and, if this bill passes, they will not support a school bond of any size. As a result, our school buildings will continue to deteriorate,” she said.