Commissioners discuss funding for property tax relief
Leavenworth County Commissioner Doug Smith says there is a lot of talk in the Kansas Legislature about tax transparency.
But Smith questions whether legislators have been following a law designed to provide local property tax relief.
Smith raised the issue when commissioners met last week.
“I am definitely for any property tax relief we can give our citizens,” Smith said.
He questioned whether a law requiring the state government to provide a share of sales tax collections to local governments is still in effect.
County Counselor David Van Parys said he could not provide a yes or no answer to Smith’s question.
“It is and it isn’t,” he said.
Van Parys acknowledged there is a state law that requires a percentage of sales tax collections be placed in a fund for the purpose of reducing local property taxes. Van Parys said there also is state law requiring a percentage of sales tax collections be placed in a county and city revenue sharing fund.
He said the property tax reduction law was amended last year to prevent the transfer of funds during the 2020 and 2021 fiscal years. He said the law establishes that $27 million should be transferred for the 2022 fiscal year. But he said the percentage of sales tax collections called for under the law is estimated to be about $100 million per year.
Van Parys said there is a similar provision in the county and city revenue sharing law that prevents money from being transferred to the fund.
“They were both amended last year,” he said.
Van Parys said, in essence, the formulas for these funds remain in place. But he said there are the additional provisions that state the transfer of money should not happen.
County commissioners argued lawmakers have not been following the law since 2001.
Commissioner Jeff Culbertson said it looks like lawmakers changed the law last year “to say they don’t have to pay us.”
“I’m trying to be transparent here,” Smith said
He argued the state government has been holding onto money that should go to property tax relief.
“If this money was available, we would have a lower mill levy,” he said.
The mill levy is used for property taxes.
Commissioner Vicky Kaaz said state lawmakers have used that money to balance the state budget.
The discussion by commissioners comes as state lawmakers consider a bill that has been referred to as a local tax transparency law.
The bill, if approved, would require new notification and public hearing requirements for cities and counties seeking to levy taxes that would exceed what is considered their revenue-neutral rates.
The bill also would remove a property tax lid that is placed on cities and counties.
County Administrator Mark Loughry said the tax transparency bill, as proposed, would not apply to the state government or school districts.
Smith said school districts make up the largest share of people’s property tax bills.
Kaaz said school districts are not providing for things such as roads, EMS or health departments.
“They’re not providing for all of the services that are being provided by the county government,” she said. “They are just providing for building their schools and paying their staff.”