More support for Proposition K in Kansas

About the only people who don’t like Proposition K are people dependent on government for their revenues. Here, a press release from the Flint Hills Center for Public Policy tells of two organizations who have endorsed Proposition K. There may be some who note that these two organizations, being involved in the real estate business, benefit from lower property taxes. Two things: First Proposition K doesn’t necessarily mean lower property taxes. Instead, it means more predicable taxes, with decisions to increase the tax rate being made in the open and with public input. Presently, property taxes increase by stealth, as the appraiser drives by and decides your property is worth more.

Second, many businesses, especially commercial landlords, are able to pass on increased property taxes directly to their tenants, which increases their costs and the prices they must charge consumers.

Wichita Associations Endorse Proposition K

(WICHITA) — Proposition K, the initiative to replace the Kansas system for assessing property taxes on real estate, continues to gain momentum as it is being studied by the Legislature. The Wichita Area Builders Association (WABA) and the Kansas chapter of Certified Commercial Investment Members (CCIM) have formally endorsed the proposed legislation.

“The proposed Prop K legislation is long overdue,” according to Wess Galyon, President/CEO of WABA, “and should be supported by anyone who has a desire to see a methodology put in place that promotes predictability in terms of what a person can expect their property taxes to be in subsequent years, greater transparency and elected official accountability in relation to decisions made to increase taxes beyond the annual 2% that would be allowed by the legislation, and can provide a benchmark in relation to efforts to curb excessive and wasteful government spending.”

Brent Stewart, President of the Kansas CCIM chapter, also cites serious problems with the current system. “We have long recognized the inequities in our present system of property taxation. Proposition K is a serious attempt to correct the problems of our present system and establish a system that is both predictable and provides that political leadership be more accountable to the voters when raising property taxes.”

Proposition K, introduced this legislative session by Rep. Steve Brunk (R-Bel Aire) 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.

Dave Trabert, President of Flint Hills Center for Public Policy, a leading proponent of Proposition K, is “very pleased with the growing public support for Proposition K, not only from organizations like the Wichita Area Builders and Kansas CCIM but also from individuals who are visiting www.PropositionK.org and attending public forums. Most taxpayers want more predictability and transparency in their property tax system and we will continue our grassroots education efforts to explain how Proposition K can satisfy their demands.”

Over the last 10 years (1997 to 2007), property taxes statewide have increased 83%. 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%. 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, Kansas CCIM (commercial realtors), Wichita Area Builders 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:

1. 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.)
2. 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.
3. 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.

5 thoughts on “More support for Proposition K in Kansas”

  1. Prop K is the wrong answer to a definite problem. I doubt that it will pass constitutional muster.

  2. Wendy, Prop K is based upon an assumption that on Day 1, all properties within a given radius are assigned a certain “value” that is an “average” of the properties around it. Average means that some properties are greater in value and some less in value. Inherently using an “average” creates discrimination in value. Those below “average” are paying more than their fair share. Those above “average” will pay less than their fair share. That’s just for starters on Day 1. From there it only gets worse. Major remodels, home sales, consumer demand, etc, all have an effect on home valuations. I don’t like the phantom increases in local budgets because of rising valuations; however, Prop K is not the answer. While the current system can be debated as being flawed, at least it attempts to insure that everyone pays their fair share which is where I think constitutionally it will fail should it pass. I don’t like that our county appraiser automatically increases home valuations the way that he does, but I’m not sure what the solution is. I do know that Prop K isn’t it.l

  3. One other thought, Prop K is an attempt to control government spending because our elected officials at any level don’t have the backbone to put a lid on increased spending. Just because total valuations go up and hence revenue, doesn’t mean that it has to be spent. We need to demand from city and county elected officials to freeze spending at its current level and to reduce the mill levy accordingly.

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