The basis for any type of taxation should be fairness. The Kansas Constitution demands that tax appraisals be ‘uniform and equal,’ meaning that county appraisers across the state must do their work consistently and that everyone pays the same assessment rates based on the Fair Market Value of each residence.
When the economy experiences high inflation (as we have for the last couple of years), it inflates the fair market value of housing as well. This year, the appraiser reported that 91% of residential property will see an average 9% increase in their property appraisal. The question is: considering inflation, is this reasonable? Some homeowners have seen much greater increases, and many have seen large increases year after year. Again, is this fair?
The Kansas legislature came up with an idea to cap the large increases. As a homeowner, part of me likes the idea, but I can see some reasons this will have enormous negative impacts on the state and our community. Senate Concurrent Resolution 1611 will cap increases at 4% per year. In years like 2022, even though the economy is inflating at about 10% per year, the appraised value of property would be limited to 4% or less per year. Whether it gets a vote in the House this session or next year, it is very likely to pass the legislative process.
This bill does not need the governor’s signature either. Whenever the House passes this bill, the issue will be placed on the ballot and voted upon by the people. If a simple majority of voters agree, then the Constitution would be amended. Regardless of higher rates of inflation, the county appraiser could only increase your appraisal up to 4% in a year. Sounds good on the surface.
My concern is for those buying and selling homes or those pulling permits to improve their home. Those homeowners will pay a higher tax burden since their appraisal will be reset to market. This solution focuses only on the rate of change and does nothing to actually cap spending or taxes. Capping the percent change in appraised or assessed value does not lower taxes. It only shifts the burden of government to those who buy a different home or upgrade their property.
By forcing the appraisals to be lower than market, we will not have a market reference that makes any sense. People will be rewarded for staying put, and those who don’t will pay a higher tax burden simply because they moved. This does not seem fair because it’s no longer uniform and equal.
When we add progressive ideas into the tax law, the result favors one taxpayer over another, which is inherently unfair. To cap appraised value growth seems like a simple solution to the ever-increasing tax burdens, but it is a misguided solution. It just creates unfairness and misses the real issue, which is the government's willingness to expand the role of government to meet the demands of the people we serve.
If we really want to cut the government tax burden, then we must reduce spending and the services currently being provided. There is an assumption by the Kansas legislature that the answer is to ‘just find efficiencies’ or ‘just do more with less.’ That also sounds great but has a natural limit as well. Eventually, when efficiencies are maximized and the waste is trimmed, the only way to reduce the cost of government and the tax burden is to cut the services we provide.
We hear lot of people clamoring for lower taxes, and they tell us to cut spending but never offer any ideas on where and how to cut. In reality, we hear more people clamoring for more services. For example, we are now considering expanding the mobile mental health services as well as expanding the public safety services due to the public demand for improvements. At the same time, I am personally committed to finding waste and trimming unnecessary spending anywhere I can.
In the end, the budget and the tax burden are just components in a simple math equation that must balance. This is your government, and we can add services or cut spending, but we cannot do both. Strangely, we hear our constituents demanding we do both at the same time, which is unreasonable.
