Painful as they may seem, property taxes sustain our communities, a life source for cities, counties and school districts. May brings the deadline for paying them, a ritual with roots deep in our state constitution: Article 11, Section 1 commands “a uniform and equal rate of taxation” on property.
This principle was chiseled into the state Constitution at Wyandotte in July, 1859, and became territorial law 18 months before Kansas joined the union of states.
Pioneer legislators believed that a tax on property was essential to fuel public services in growing settlements across the plains. It was the way to put bridges over creeks and rivers and to carve roads from the trails. It would pay the schoolmaster and the sheriff and keep the fire wagon ready.
A “uniform and equal” levy was to spread the cost of community maintenance and improvement. It was thought fair, then, because the extent of the tax reflected the productivity of the land, not its market value, real or imagined. And productivity was the promise of Kansas.
But promise is fickle. A tax written into the Constitution to help make life better became a source of exasperation, the scorn of farmers, merchants, nearly anyone else who owned even a sliver of property.
After the Homestead Act (1862), land became a formative resource for farmer, rancher, and town booster. The value of property would be increased by “improving” it. Farms became productive and ranches fattened cattle. Townships sprouted towns and towns became cities.
Land was valuable for what was under it as well as what could be grown in it or built on top of it. Coal, oil and gas had been discovered as early as 1855 but continuous commercial ventures were not producing until the 1890s in eastern Kansas, and the 1930s in the west.
The value of land fluctuated against demands and uses so unpredictable that no law of appraisal could reflect reality. Commerce now included coal, oil and gas. Irrigated farm land and feed lots expanded in the west and suburbs sprawled in the east. Even the keenest assessors could only hack at the edges of the bewildering thicket of land use and value. The property tax had become the torture of politicians and constituents. Its practical application defied law, flying in the face of its keeper, the Constitution.
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In 1980, a year into John Carlin’s first term as governor, the Santa Fe Railway sued the Kansas Department of Revenue, claiming that the railroad was assessed for property taxes at rates higher than other businesses.
At that time, property was to be appraised at “fair market value” and assessed for taxing at 30 percent of that value. That wasn’t happening. Only utilities paid taxes on a 30 percent assessment because in their case, the state – not counties – did the assessing.
County appraisers could not keep up with the 30 percent law. The ratio of sale prices (market value) to appraised value – known as the sales-assessment ratio – rarely approached even a double digit, much less 30 percent in any city, township or county.
Four years after the suit was filed, the railroads and the state arranged through federal court for tax rates lower than proscribed by law. The courts ruled that
railroads were entitled to lower rates because county assessments were far below state levels.
That seemed to settle the trouble between railroads and the state. But what of others?
In 1986, the last year of his two terms as governor, Carlin spent much of his time campaigning for six amendments to the Kansas Constitution. One of them ordered (rather than permitted) the Legislature to rewrite farmland assessment laws and enact use-value farmland appraisals; thus, farmland would be appraised by its ability to produce income.
The amendment also provided for classification of real and personal property with assessments at different percentages of value; farm machinery and equipment, merchants’ and manufacturers’ inventories, and livestock were exempt.
The voters approved.
(Next: Reappraisal)
