State lawmakers want to cut property taxes after doing so last year. The governor worries about the cost of another cut
Kansas lawmakers started debating tax plans in early 2024 and didn’t agree to a cut until the summer sun shone all across Kansas. The governor vetoed three tax cut bills, and lawmakers returned for a special session where they came to terms on $1.2 billion in cuts over three years.
But lawmakers still left disappointed.
“I’ll be back (next year) to work on real property tax relief that our citizens deserve,” Rep. Bill Clifford, a Garden City Republican, said at the end of the 2024 special session on taxes.
Lawmakers return to Topeka in January, and property tax cuts are a top priority for the Republicans who control the Legislature. The tax fight could again be contentious because Democratic Gov. Laura Kelly has already said she won’t support property tax cuts in 2025.
The 2024 plan would cut state revenue just under $2 billion over five years, and Kelly wants more time to see how the latest slew of cuts tests the state’s ability to pay for public services.
“While it’s politically attractive to (cut property taxes) right now, in the long run, they would have to do some things that are politically very unattractive, like cut school funding,” she told KCUR’s “Up to Date.”
Kansas imposes a type of tax on homes called mill levies. House Speaker Dan Hawkins, a Wichita Republican, said he expects to cut a few mills, or varying fractions of the tax rates, that fund education and construction, and he expects this proposal to be introduced in the first weeks of the session.
Hawkins said the proposal to cut funds will also come with a proposal to use state general funds to make up for the lost money. He wants to cut taxes, but he doesn’t want to leave schools or construction projects shortchanged.
Hawkins said he knows the governor opposes the idea, but he and every lawmaker were knocking on doors during the campaign trail in 2024. Property taxes were a major focus.
“People are getting pounded with this property tax,” he said.
What has the Legislature already done?
The 2024 tax cut raised property tax exemptions from $40,000 to $75,000. Previous proposals, which failed, would have raised the exemption to $100,000 of appraised value. But Kelly blocked that larger tax cut to limit the cost to state revenues to no more than $425 million a year. Plans with the higher property tax relief had a $630 million price tag in the first year and $430 million each year after that.
Lawmakers fought for tax cuts amid a multibillion-dollar budget surplus, and they wanted a multibillion-dollar tax cut. There were no major cuts to state spending.
Hawkins is trying to limit spending, though. State agencies have already proposed their budgets for 2025. In total, state agencies asked lawmakers for about $1 billion in new job openings, pay raises, building enhancements and more.
Hawkins made a motion to remove every enhancement request during a budget hearing in December. That doesn’t mean nobody gets new jobs or pay raises, but the budget committees just need to fund only their priorities.
Who supports the proposal?
Hawkins said in a November press release that he isn’t going to pause on tax cuts like Kelly wants.
“Kansans don’t have time for us to drag our feet or take a breath,” Hawkins said in the statement. “Instead, they need breathing room from the burden of sky-high property taxes.”
Kelly was able to convince enough Senate conservatives to oppose high-cost tax cuts. Some of those lawmakers didn’t run for reelection, and one lost a primary race.
Hawkins said property tax relief is such a priority that some Democrats might support the proposal.
Who opposes the proposal?
Kelly is the main opponent of property tax cuts. She said on KCUR’s “Up to Date” that local counties are a main source of property tax money, and she wants more time to see how the 2024 plan works.
It isn’t clear what the property tax proposal could look like, but Senate Minority Leader Dinah Sykes, a Lenexa Democrat, said she will oppose any cuts that go too far.
Though Republicans hold a supermajority in the House and Senate, Sykes said that “Kansas voters did not give Republicans a mandate to pass fiscally irresponsible tax legislation that takes our state back to the days of chronically underfunded schools, crumbling roads and bridges, and crippling debt.”