Kansas Governor Sam Brownback has proposed property tax reform that may bring balance and relief to property taxes.
The governor’s proposal is that when the value of property taxed by local governmental jurisdictions rises, the mill levy (tax rate) will be lowered so that there is no increase in total tax dollars levied.
New property will still come on the tax rolls at its appraised value. Local governments can vote to raise the mill levy if they feel they need more property tax revenue.
But instead of relying on rising property values automatically boosting tax revenue, government will have to be honest with citizens when they want more money. While property values haven’t risen in recent years, hopefully they will soon, and we could have this problem again.
Most proposals in Kansas for property tax reform consist of simply transferring tax revenue from the state to local jurisdictions. That’s not very much reform.
In 2008 I noted this phenomenon in the following article:
The combination of a rising mill levy (the rate at which property is taxed) and rising appraised values mean that property taxes paid to USD 259, the Wichita public school district, rise rapidly.
Appraised values in Wichita have risen faster than general inflation. The Consumer Price Index, a measure of the general inflation rate, rose by 24% from 1999 to 2007. Over the same time period, the Sedgwick County house price index rose by 34%. This means that district revenues — if the mill levy didn’t change — will rise faster than the inflation rate. When the mill levy is increased, property tax revenues rise very rapidly. The following table illustrates.
I think this proposal from Brownback is a good start. It’s amazing to me the amount of flak the governor has received over this proposal.