Weskan, KS – State Representative Adam Smith, honored to serve as the House Taxation Committee chairman, issued the following statement in response to the press release and personal attack from Senate President Ty Masterson… but not until traveling home from Topeka on Saturday to spend time with his family and respectfully putting politics on the back-burner on Sunday.
“Instead of retaliating with the vitriol and personal attacks that are so common in the political realm these days, I would like to offer a rational rebuttal of certain accusations made against my integrity and intentions on property tax relief.
I completely agree Kansans have had enough. But they deserve more than a shell game disguised as property tax relief. The Senate’s proposal of a 3% valuation cap has been touted as real property tax relief, but no one can answer the question “how much?” because manipulating valuation only gives the false pretense of lower taxes.
Restricted taxable valuation does not always result in lower taxes, and I am more than willing to explain.
Local governments, which determine the bulk of your property tax bill, don’t set the mill levy – they adopt budgets and then calculate the tax rate required to fund their budget. If valuations are restricted, the mill levy will just increase and their budget will still be fully funded.
I won’t argue the fact that the Senate’s 3% valuation cap would provide tax relief for some. But the simple question to ask is… if the government is still fully funded, where does the tax relief come from?
The answer will disturb you… other taxpayers.
If the cap is 3%, a property with a 20% increase gets a 17% reduction in value whereas a property with a 3% increase gets NO reduction in value. Since the overall tax base is artificially restricted but the local governments are still fully funded, the total mill levy will be higher than it would have been without the cap. All properties with small valuation changes will actually see a tax INCREASE to offset the other properties receiving a large benefit from the cap. That is the sole reason this valuation limit has to be placed in the Kansas Constitution – it would otherwise violate the “equal and uniform” clause and be ruled unconstitutional if attempted as a law.
Despite this poorly conceived policy, I continued to work with the Senate President and legislative leadership on ways to compromise on this proposal.
Apparently Masterson felt I was being disingenuous from the beginning.
I’m not certain how I could have been more ingenuous?
I told him where I stood on the 3% cap and why, but said I would give him my vote on SCR1616 and encourage members to get it on the ballot for the people to vote. I did exactly that.
I offered to step aside and gave him the opportunity to hand pick someone else to lead his effort. He refused.
I offered my letter of resignation to the Speaker to allow him to appoint someone else to the committee. It was refused.
I explained the number of votes they needed to gain – last year the 3% cap received 37 votes and needed 84 to pass. I was never misleading about the number of members opposed to the resolution.
In the first conference committee meeting of the two chambers on the constitutional amendment, I offered the compromise proposal that had been agreed to in a meeting of the Senate President, Majority Leader, tax chair, House Speaker, Majority Leader, and myself. The offer was promptly rejected.
While I’m not personally a supporter of government interference in the free market, I introduced a different type of valuation limit that avoids unfair tax treatment while still preventing sharp spikes in valuation. It was refused.
For those Kansans that desire true property tax relief, neither of the two primary measures proposed provide a reduction in your property tax bill. Even the tax lid on local government spending is a method to only slow the rate of growth in property taxes. The only way to provide true property tax relief at the state level is to subsidize property taxes with income and sales tax revenue.
Some of the proposed ways to do this were increasing the existing residential exemption for homeowners, expanding the property tax refund programs, reducing the statewide mill levy for schools that is set in statute, and providing a limited-time property tax rebate check from the state to each property owner.
There are many ways we could provide direct property tax relief, but out of the $10.7 billion general fund budget this year, not a penny was dedicated to enhancing existing property tax relief programs or providing any additional property tax relief. Read that again.
We’ve passed tax credits for aviation, angel-investors, and others, not to mention incentives foregoing massive amounts of current and future revenue for things like Panasonic and the Kansas City Chiefs. We’ve even handed out money for the World Cup.
If Masterson wants to try to blame me for the lack of property tax relief in Kansas, I would remind him that as the President of the Kansas Senate, he had the power to prioritize meaningful property tax relief in many various ways. Instead, he gambled everything on a single flawed policy and came up empty.”
