Property Taxes Top the Legislative Agenda in Kansas

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Property-tax changes with major consequences for Kansas schools are likely to be the top priority of the legislature when it returns to work later this month, state lawmakers and aides said last week.

In his January State-of-the-State Address, Gov. Mike Hayden called on legislators to reduce property taxes and make 1990 "the year of the taxpayer in Kansas."

By the time lawmakers began their recess April 7, no bill to limit or reduce property taxes had moved through both legislative chambers.

But observers predict that some form of property-tax relief probably will be adopted before final adjournment in early May.

They add, however, that the difficulty of reaching an agreement on ways to make up lost revenues may be the chief obstacle to passage of a property-tax curb. Thus far, proposals to raise the sales tax by one cent and to broaden the tax base have been rejected.

"It's not unanimous, but a good majority [of legislators] thinks property taxes should be rolled back," said the Senate majority leader, Fred Kerr.

Property-tax reform could have a profound effect on the state's school districts, which rely on local property levies for about half of their funding. Currently, districts are not allowed to impose any other sort of tax to pay for education.

Kansas' 'Proposition 13'

At the center of the Governor's program was a "Kansas Proposition 13" proposal, which, like the California law for which it was named, would permanently limit property-tax collections.

Mr. Hayden also asked the legislature to adopt a two-year interim measure that would limit the amount of taxes that could be collected by cities, counties, and school districts to the amounts collected in 1989.

The current debate over property taxes comes a year after Kansas homeowners and small businesses were hit with sharply higher taxes as a result of a state program of property classification and reevaluation. Under a 1986 constitutional amendment, the rates at which certain types of property were taxed were changed. And last year, for the first time in more than 20 years, property values were reappraised.

Observers said there is broad sentiment that the state and the schools rely too heavily on the property tax.

The state board of education, for example, this year urged that property taxes be lowered. The board, which also called for more state aid to schools, did not recommend how the additional funds should be raised.

While jockeying over property-tax proposals continues, lawmakers also are working on changes in the state's school-finance formula aimed at protecting school districts from shifting valuations.

Under a bill passed by the Senate this month, districts next year would get the same amount of aid that they currently receive. If the formula currently in place is left unchanged, the state's equalization formula will direct more state aid to property-poor districts, and less to relatively wealthy districts.

Most analysts expect, however, that any school-finance legislation approved this year will have to be reworked during the 1991 session, in light of the anticipated changes in the property-tax system.

Capital-Improvement Curbs

By the start of its recess, the legislature had made no move to adopt a Kansas Proposition 13. The House, however, has adopted a measure that would limit the amount of taxes collected by cities and counties.

Under the bill, school districts would still be allowed to raise property taxes for their operating budgets, but would not be allowed to raise taxes for capital improvements, such as school construction.

The Senate, meanwhile, has adopted a measure that would shift the tax burden from small businesses and single- and two-family dwellings to larger businesses and multi-unit housing.

Frank Ybarra, a spokesman for the Governor, said that despite "a lot of stonewalling," Mr. Hayden believes the legislature will eventually adopt property-tax limits. Mr. Hayden plans to call a special session if legislators do not approve such a bill during the regular session, the spokesman added.

Vol. 09, Issue 30

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