Gov. Sam Brownback’s plan to slash state spending for
schools comes from his overall mission to abolish the state
income tax; to cover the resulting revenue losses, he would
force massive cuts in the state budget. This can’t happen with-
out reducing spending for education, the largest single state
Brownback has directed the Kansas Legislature to abolish the
state’s current school finance law. To replace it, he has offered a
vague, two-year plan to send block grants to each school district
in amounts equal to their current state aid allotment. Depending
on the school district, the grants will cover from 65 to 80
percent of the schools’ operating costs. To pay the remainder,
districts will rely on local property taxes.
A tax on property was the first foundation for government
finance, written into the territorial constitution in 1859, 18
months before Kansas joined the union of states – long before
the state would have an income tax (1931), and even longer
before schools would become the state’s largest single obliga-
tion and expense.
The Kansas history of school finance is a litany of complex-
ity and passion, of the co-mingling of local and regional cul-
tures and economies, of the conflicting interests among patrons,
parents and politicians. But this history is also distinguished,
not long ago, by a remarkable package of compromises, the
incubation of historic reforms in state funding of local public
The School Finance Act of 1992 demonstrated that legislators
had discovered, with considerable success, a way to manage
both education funding and the property tax that supports it. It
did not happen easily.
INITIALLY, PART of the trouble lay in human nature, and how
people tend to view government funding: Impose taxes so the
other person pays them. The trouble was compounded with
property taxes because the system seemed to lack all fairness.
Thirty years ago, Gov. John Carlin and the Kansas Legislature
placed a big part of the problem in the appraisal and assessment
of property, and decided to fix it. The plan, through a constitu-
tional amendment, was to classify property by use, assign it a
value, and limit assessment rates in various categories – utili-
ties, agriculture, residential, businesses and so forth.
At that time of pre-reform, property was to be appraised at
“fair market value” and assessed for taxing at 30 percent of that
value. But it had never really worked that way. Only utilities
were paying taxes based on 30 percent assessments because the
state was charged with utility assessments. For other property,
assessments were for county appraisers. And in far too many
cases, setting local assessments seemed to be a matter of throw-
ing darts at a board in the court house boiler room.
Appraisers were never able to keep up with the 30 percent
law. The ratio of sale price (market value) to appraised value
– the sales-assessment ratio – rarely if ever approached 30 per-
cent in any city, township or county.
Carlin convinced lawmakers of the need for a constitutional
amendment to accomplish two things: a massive, statewide
reappraisal of all property; and listing various classifications of
property for a range of assessment rates. Among the key clas-
sifications and rates: residential, 11.5 percent; mobile homes,
11.5 pct.; personal property, 25 pct.; businesses, 25 pct.; utili-
ties, 33 pct., and others.
One other classification was critical, at the time perhaps the
Constitution’s most necessitous: farmland would be appraised
by its ability to produce income and assessed at 30 percent. The
political and economic impact of this section was so significant
that the entire amendment, covering a dozen classifications,
came to be known simply as the “use-value amendment.”
This is because the amendment, approved by Kansas vot-
ers in November 1986, protects farmland assessments through
use-value property appraisal; taxes were (and are) determined
by the income derived from the land, not by its market value.
The amendment was to prevent owners from being forced to
sell land simply to pay the taxes on it. It was a critical reform,
exposing a glaring issue with property taxes, the chief compo-
nent in the system for funding local schools.
THE PROPERTY tax is generally viewed as a hangover from the
Pony Express days, the early years of Kansas settlement, when
property and the assessment of a “uniform and equal” levy were
to spread the cost of community services and improvements. It
was thought fair, then, because the extent of the tax reflected
the productivity of the land, not its market value, real of imag-
ined. Productivity of the land was the promise of Kansas. All
this changed as settlements became towns, and then cities, and
agriculture prospered. And good schools became important for
Although the property tax was written into the territorial
constitution ten years before Kansas became a state, the state
income tax was not adopted until the early 1930s.
Since then, property taxes have come to be seen as dated,
a relic of the Homestead Act. The tax is expensive to collect
and, as history notes, it is hardly uniform and rarely equal. It
has been revealed to have a negative social impact. Property
maintained and improved is taxed more; the inefficient and the
negligent are rewarded with lower taxes.
One premise in the issue of government finance is that the
property tax now is valid only in relation to property, not
people. That is, taxes on property might pay for rural roads and
bridges, for rural fire and water systems; in town, the property
tax would finance non-arterial streets, storm sewers, parking,
even subsidize low-income housing.
Taxes for people functions are in another class. These should
come from income and sales taxes and user fees collected
chiefly on a statewide basis. The cost of public schools, as sug-
gested in early reform debates, should relate not to the value of
land in a district but to the number of students to be educated. A
state-run and state-financed school system might not be a popu-
lar idea, but it seemed logical. The state was paying, on average,
nearly 70 percent of the cost in local districts, with local boards
in charge of operations.
PROPERTY TAXES have been tied tightly to the premise of
local control, although the income tax as a far better, more
equitable source of state revenue for local government. This
suggestion runs contrary to the feeling that local control is bet-
ter, that friends and neighbors can manage their towns more
reasonably than costly and troublesome bureaucracies. Usually
they do. But today’s friends and neighbors are no longer apt
to be tomorrow’s. Consider the transience of Kansans today;
many programs such as welfare, Medicaid, and transportation
have been on a state basis for years, supported by income or
This runs counter to the governor’s dream of a state with no
income tax, a plan that invites a return to the past, to the days
of heavy reliance on the property tax and the hope that we can
continue to make some sense of it; local control would become
local rule with the state relegated to the status of bystander.
In reality, this may be seen as a momentous shift, the burden
of finance moved from one fellow to the other. The system will
always demand revenues, and history tells us that the system
relying on property taxes tended easily to get out of control.
And the price of that system too often has been inequitable
and discriminatory taxation with equally unfair results.
We fixed it once. The governor’s plan sets aside those
reforms. Kansas with no income tax is a state returned to the
1920s or before, to a heavy reliance on state and local property
taxes, before the roads were much good, before the farms had
electricity and the cities had decent water, before the state
shared revenue with cities and counties, and before the schools
The income tax gave us the difference between SRS and the
poor farm, between the one-room school and low-enrollment
aid, between hunger and the school lunch, between walking or
staying on the farm and a ride on the bus, between the teacher
who cared and one who couldn’t afford to. Between a public
that hoped, and those who had given up.
– JOHN MARSHALL
(Next: Targeting rural schools)