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Minutes for HB2815 - Committee on Taxation
Short Title
Abolishing the local ad valorem tax reduction fund and the county and city revenue sharing fund, discontinuing certain transfers to the special city and county highway fund and decreasing rate of ad valorem tax imposed by a school district.
Minutes Content for Wed, Mar 13, 2024
Adam Siebers, Assistant Revisor, provided an overview on HB2815 that abolishes the local ad valorem tax reduction fund and the county and city revenue sharing fund as of July 1, 2024. (Attachment 1) Mr. Siebers stood for questions from Committee members.
Kathleen Smith, Kansas Department of Revenue, provided an overview on the fiscal note for HB2815 stating the bill would reduce the statewide mill rate to fund public education that would result in a reduction of property tax revenues totaling $94.2 million in FY2026, $136.2 million in FY2027, $180.1 million in FY2028, and $226.0 million in FY2029. The Division of Budget notes that the estimated reduction and revenues from the school levy would require an offsetting appropriation for State Foundation Aid from the State General Fund to keep the Base Aid for Student Excellence (BASE) in the school finance formula at $5,623 for FY2026. The Division of Budget also noted that the bill would increase the State General Fund Revenues by $171.5 million in FY2026, $173.6 million in FY2027, $176.0 million in FY2028, and $178.4 million in FY2029 by eliminating the State General Fund transfer to the LAVTRF the County and City Revenue Sharing Fund and the Special City and County Highway Fund. Ms. Smith stood for questions from Committee members.
Proponents:
Representative Shannon Francis, 125th District, testified as a proponent for HB2815 stating many times there is discussion regarding the three-legged stool and one of the legs is property tax noting it is time to eventually get out of the property tax business and leave those revenues to local governments. Property tax is one of the most hated taxes and the way the legislature tries to lower taxes ties the hands of local governments and makes it difficult for them to address the needs of their constituents. The benefit of HB2815 would lower the statewide mill levy by two mills to 18 mills and make it revenue neutral. This will help all real property taxpayers including commercial, agricultural, residential, and state assessed. (Attachment 2) Representative Francis stood for questions from Committee members.
Eric Stafford, Kansas Chamber, testified as a proponent for HB2815 that will eliminate the Local Ad Valorem Tax Reduction Fund and reduces the statewide education mill rate from 20 to 18 mills, protecting Kansans from future increases caused by changes in the valuation of property. The state, through the general fund, would make up the difference. (Attachment 3)
Dave Trabert, Kansas Policy Institute, testified as a proponent for HB2815 which eliminates the Local Ad Valorem Tax Reduction (LAVTR) statutory language and reduces the state-imposed property school property tax from 20 mills to 18 mills. LAVTR did not result in local property tax reductions when it was in place noting county-imposed property taxes increased by an average of 7.6 percent which is almost twice as much as the current five-years average of 3.9 percent. (Attachment 4)
John Donley, Kansas Farm Bureau, testified as a proponent for HB2815 is a step in the right direction to begin reducing some of the property tax burden for Kansas taxpayers. The reduction and capping of the property tax portion of the funding for K-12 education is a good start toward relying more on sales and income tax to fund K-12 education through state general fund dollars. (Attachment 5)
Jonathan Lueth, testified on behalf of Michael Austin, Americans for Prosperity Kansas, as a proponent for HB2815 that removes the Local Ad Valorem Tax Reduction (LAVTRF) and the county and city revenue sharing fund, discontinuing certain transfers to the special city and county highway fund and decreasing the rate of ad valorem tax imposed by a school district. (Attachment 6)
Aaron M. Popelka, Kansas Livestock Association, testified as a proponent for HB2815 that would provide property tax relief across all classes on taxable property. The Kansas Livestock Association supports increased reliance on income tax and other non-property tax sources for support of local school districts and reducing the reliance of local government on property tax revenues. (Attachment 7)
The proponent conferees stood for questions from Committee members.
Written testimony was submitted by Mark Tomb, Kansas Association of Realtors as a proponent for HB2815. (Attachment 8)
Opponents:
Mike Taylor, Strategy Consultants, testified on behalf of Kansas County Commissioners Association, as an opponent for HB2815 that would permanently eliminate the Local Ad Valorem Tax Reduction dollars, the City County Revenue Sharing Fund (CCRS) and take a piece of funding that is suppose to go to the Special City-County Highway Fund (CCRS). State government has given more duties on counties to perform on behalf of the state, sheriffs, jails, district courts, community corrections, public health, mental health, register of deeds, vehicle registrations, elections and tax collections are all state duties performed and paid for by county taxpayers.(Attachment 9)
Jon Quinday, City Manager, City of Russell, Kansas, testified via WebEx as an opponent for HB2815 stating this legislation poses a grave threat to their communities and schools, increases economic hardships and imposes undue burdens on citizens through increased property taxes. (Attachment 10)
Leah Fliter, Kansas Association of School Boards, testified as an opponent for HB2815 that has an impact on funding for public schools. She noted the Kansas Association of School Boards has concerns regarding the approach to property tax reduction in Section 6 of HB2815 with the statewide mill levy for schools. (Attachment 11)
Spencer Duncan, League of Kansas Municipalities, testified as an opponent for HB2815 requested to remove Section 1 and New Section 2 from HB2815, and not eliminate the Local Ad Valorem Tax Reduction Fund or the City and County Revenue Sharing Fund. City governments and the State Legislature need to work together on the development of tax policies to better craft tax policies that fulfill the needs of each unit of government while reducing taxes. (Attachment 12)
Jay Hall, Kansas Association of Counties, testified as an opponent for HB2815 that would abolish the Local Ad Valorem Tax Reduction Fund (LAVTR) and the county and city revenue sharing fund as well as discontinuing transfers to the special city and county highway fund. He noted rather keeping this revenue at the state level, the Kansas Association of Counties respectfully asks the committee to restore these partnerships with local governments. (Attachment 13)
The opponent conferees stood for questions from Committee members.
Written testimony was submitted by the following as opponents for HB2815:
Lou Thurston, Mayor, City of Hillsboro, Kansas, (Attachment 14)
Rod Kreie, Mayor, and Daniela Rivas, City Manager, Newton, Kansas, (Attachment 15)
Terry Sommers, Mayor, City of Mount Hope, Kansas (Attachment 16)
Angela Richard, Finance Director, City of Hutchinson, Kansas, (Attachment 17)
Russ Kessler, Mayor, City of Haysville, Kansas (Attachment 18)
Paul T. Davis, lobbyist on behalf of Unified Government of Wyandotte County and Kansas City, Kansas, (Attachment 19)
Cindy Holle, City Clerk, City of Marysville, Kansas, (Attachment 20)
Charlie Hunt, Director, Johnson County Department of Health & Environment, (Attachment 21)
Stuart J. Little, Ph. D., Little Government Relations, (Attachment 22)
Michael Koss, City Attorney, City of Overland Park, Kansas, (Attachment 23)
Ron Fehr, City Manager, City of Manhattan, Kansas, (Attachment 24)
There were no neutral conferees for HB2815.
Chairperson Smith closed the hearing for HB2815.
