Flint Hills Center on property taxes

From the Flint Hills Center:

Contact:  Dave Trabert

January 28, 2009
(316) 634-0218

Proposition K Will Make Property Taxes Fairer and More Predictable

(WICHITA) – A new property tax initiative—known as Proposition K—seeks to stabilize property taxes in Kansas and make local government budgeting more transparent for taxpayers. Yet Proposition K places no limits on the ability of elected officials to raise revenue or balance budgets. Rep. Steve Brunk (R-Wichita) will introduce the Proposition K legislation today.

Over the last 10 years (1997 to 2007), property taxes statewide have increased 83% (see attachment—Tax Growth by County). Residential property taxes are even worse, with a 119% increase in total collections. There simply is no good reason for these outrageous increases. It’s not driven by a need to serve more people; Kansas’ population has only grown 7% over that same period. It’s not inflation; the Consumer Price Index increased about 2.5% per year. It’s the appraisal process.

The statewide average mill rate has increased 10% over the last ten years, but appraised values (on all property) have jumped 66% (see attachment—Residential Value & Income Growth). These two moving parts of the current system have generated an 83% tax increase.

Proposition K offers a viable alternative to the appraisal process that drives unpredictable property taxes.

It’s a simple plan that will apply to all classes of real estate except agricultural land, which has its own set of rules under the Kansas Constitution. “Proposition K: A Better Property Tax System for Kansans” is the subject of a study conducted by Dr. Art Hall, Executive Director of the Center for Applied Economics at the University of Kansas and is published by the Flint Hills Center for Public Policy at www.flinthills.org. Proposition K is supported by the Kansas Building Industry Association and Americans for Prosperity; several other organizations are expected to join the coalition in the near future.

Proposition K uses 3 key elements to replace the tax-related appraisal system on real estate:

On a specific date (January 1, 2010 in the legislation) current property values become fixed as the so-called “baseline value.” (Property owners will always have the ability to appeal.)
Each property’s baseline value increases by 2% each year. Properties never revalue for tax purposes unless substantially improved or altered. Upon sale, the new owner inherits the annually-adjusted baseline value of the property.
To preserve fairness and promote simplicity, the plan applies to new construction, substantial alterations to existing structural improvements and re-classified land the average per-square-foot annually-adjusted baseline values of nearby properties.

A new web site at www.PropositionK.org explains the plan, provides downloads of Dr. Hall’s study and other information, offers a forum for citizen comments and includes a means for individuals to indicate whether Proposition K should be adopted.

Flint Hills Center for Public Policy will be conducting a series of public forums on Proposition K. The first meeting will be held on Thursday, January 29 at 6:00pm at Willowbend Golf Club (8001 Mulberry Drive in NE Wichita). The public is invited to attend.

# # #Flint Hills Center for Public Policy • 250 N. Water, Suite 216 • Wichita, KS 67202-1215 • (316) 634-0218

As a non-profit, nonpartisan think tank, the Flint Hills Center for Public Policy is an independent voice for sound public policy solutions that will enhance the well-being of all Kansans. Visit www.flinthills.org for more information.

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