High tax Kansas exposed again

High Tax Kansas Exposed Again
By Karl Peterjohn, Executive Director, Kansas Taxpayers Network

Businesses and homeowners know that Kansas has high taxes. The appointed and occasionally elected officials setting this state’s fiscal policy are often contemptuous of the fiscal burden being imposed upon Kansans but this is a reality that should not continue to be ignored.

USA Today reported July 28 that Kansans pay the 14th highest level of per capita property taxes among all 50 states. This was 2004 Census Department data. The high property tax in Kansas means that Kansans pay well above the U.S. average property tax too. This is a bigger problem for Kansans because income in Kansas is only 93 percent of the U.S. average. The number one and two states having the highest property taxes in this survey, New Jersey and Connecticut, both have higher than average income levels.

The high Kansas property tax creates several surprises that are being ignored by public officials. This includes residential and farm property tax hike advocates like Governor Sebelius. Since there are high taxes on property in Kansas there is a relative decline in housing prices. When relatively hidden property taxes, like special assessments, are included on newer housing, the property tax burden is actually higher since most other states do not impose this extra property tax burden.

So national surveys look at affordability in housing and Kansas scores well. There is a lot of reasonably priced housing that has large property tax bills on it in this state.

Since capital goes where it is appreciated, there is a relative decline in business here so commuting times are low. When business leaves, so go the jobs. Kansas employment growth lags behind the U.S. average. According to the governor’s most recent Economic and Demographic Report for the 2007 state budget, show Kansas job growth and income levels both lagging behind national and regional growth. So, it should not be a surprise that public school enrollment continues to decline too. Job seekers take their children with them.

When Kansas students graduate and enter the job market they often discover that economic opportunity is not in Kansas and they move to more economically vibrant and competitive areas. Even former Governor Graves joined this exodus and left Kansas. Often these folk become “Kansas tourists” who return to see family at Christmas, Thanksgiving, or maybe for a week in summer.

Affluent Kansans have a tendency to move to states without income taxes as well as states where there are limits on government growth like Colorado with their Taxpayers Bill Of Rights. Colorado scored 23rd on per capita property taxes but far exceeded national income averages.

Oklahoma, which requires super-majorities for some tax hikes and voter approval before state taxes are raised, had the lowest property taxes in this region scoring 47th nationally. Arkansas scored 49th while Alabama was 50th. Missouri was 37th. It is interesting to note that only Nebraska has a lower percentage growth in population than Kansas according to Census figures. Nebraska’s average property taxes were only a couple of notches lower than Kansas at 16th.

This per capita rating does not adjust for the wide variance in property taxes within or between states. Utility property is the highest taxed in Kansas with a 33 percent assessment that is almost three times higher than the 11.5 percent assessed on residential property. Small businesses in Wichita pay a much higher proportion of property tax on $100,000 of commercial property than Boeing or Cessna who enjoy their 100 percent property tax abatements. The details in taxation matter a lot.

The average Kansan may not know the tax details but they do know that when all else fails, they can still vote with their feet. The fact that neighboring Arkansas has now passed Kansas in population is a wake up call that is being ignored by Kansas public officials. High Kansas property taxes in particular and high Kansas taxes in general are both reasons for Kansas’ decline.


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