“We can’t have a balanced budget, a sustainable budget, if there are any serious tax cuts this year,” Kelly told The Capital-Journal. “So I have asked, and I will ask again, for the Legislature to be prudent and patient and let us get through this session and see what the impact of the last very robust tax cuts is on the budget and then look forward to ’26, if there’s wiggle room there.
She stopped short of threatening to veto property tax relief.
“I never pre-veto bills,” Kelly said. “I always look at what comes across my desk. And things could change, I mean, I never want to close the door completely. Because what if our revenues skyrocket and it clearly is a trend that’s going to continue? Obviously, new information would require new analysis.”
New analysis may be required regardless, as budget projections are tighter and Republicans have vowed to cut spending.
“You can’t have tax relief and not cut your spending, otherwise you get out of whack,” Hawkins said.
House Minority Leader Brandon Woodard, D-Lenexa, indicated he will follow the governor’s lead on tax cuts.
“I look forward to working with the governor’s office to figure out what we can do, if any,” Woodard said. “I know that she’s been pretty clear about holding and showing restraint in 2025. We’ll have to see what the Republicans end up doing. I know they’ve said day one, but they’ve said that in the past.”
What could Kansas property tax relief look like in 2025?
There are a couple different ways lawmakers have suggested they’ll tackle tax cuts this year. The most straightforward is a reduction in the state mill levy. Another option is increasing the residential exemption, which has been done in the past, but not by as much as some have proposed.
The state levies 21.5 mills of property tax, which is equivalent to $21.50 per $1,000 of assessed home value — which is itself 11.5% of its appraised value. But residential properties also get an exemption for 20 of the mills on the first $75,000 of valuation.
The state property tax revenue is mostly used to help fund local public schools, but some of the money also goes toward state building construction and maintenance.
Hawkins said he anticipates the House GOP tax plan will cut the mill levy, with the lost revenue — at least for school funding — being backfilled by the state general fund.
“It’s not like we’re going to reduce our revenue, we have to make up with it somewhere else,” he said.
Hawkins said the rough estimate is that each mill of the state levy raises about $45 million. He said the tax plan will probably cut somewhere in the area of 2 or 3 mills, ranging from roughly $90 million to $135 million.
That provides flexibility as lawmakers work to balance the budget. Hawkins said the tax committee chair, Rep. Adam Smith, R-Weskan, and the appropriations committee chair, Rep. Troy Waymaster, R-Bunker Hill, will be looking at the numbers.
“Our (budget) profile is starting to not look so good,” Hawkins said, “and so we’re going to have to really make sure that we are setting the proper priorities for our spending level and make sure our spending level is at a level that can sustain any property tax relief that we do.”
Tax increases from home appraisal growth
There’s also a chance the Legislature attempts to address “appraisal creep,” where taxing entities maintain current mill levies but make more money as property values increase.
“Where is the increase in property tax coming from? It’s coming from appraisals,” Hawkins said.
One tax relief proposal that could come back this year is a constitutional amendment to cap the growth in property valuation increases. Such an amendment passed the Senate in 2023, but never got a vote in the House in 2024.
Supporters have argued that it would help seniors on fixed incomes to not be taxed out of their homes as they age. Economists have said local governments would likely raise the mill levy to compensate for the valuation growth cap, shifting more tax burden onto people who purchased a home more recently, such as younger first-time homeowners.
Hawkins is not convinced that capping appraisal growth is the answer to the problem.
He said he plans to ask the Legislature’s research team or its auditors to study the issue. He wants to see if the actual sales prices of real estate are close to the county appraisals.
“Because if they are, then the appraisal system is correct,” he said.
Holding local government accountable on property taxes
Hawkins said that Kansans should look to hold local government budgets accountable for their taxes and spending.
“From a state level,” Hawkins said, “we only have 21.5 mills under our control. … Everything else is controlled at the county, city, school district, all the taxing entities across the state, libraries. There’s tons of taxing entities across the state. They have control of their mills.”
The state’s 21.5 mills is a relatively small share of most people’s property taxes compared to local governments. For 2024, Shawnee County levied about 48 mills, Topeka levied about 37 mills and local school districts levied between about 16 and about 41 mills. The county also has townships, fire districts, drainage districts, sewer districts, a library district, transportation districts and Washburn University that levy property taxes.
“The people of the state need to understand that they need to hold their county their county commissioners and their city council and their school district board accountable for their mill levies, because they do have the ability to control that. We don’t. We can’t tell them what to do on that,” Hawkins said.
He said that accountability extends to property tax increases attributable to appraisal growth.
“The problem is, is the prices of homes keep going up, so you’ve got that appraisal creep, it’s going up, and the mill levies are staying the same, but they are increasing their budgets just from the tax off of appraisal,” Hawkins said.
“As those appraisals go up, they have the ability to lower their mills to be revenue neutral,” he said. “They just choose not to. They look at that as a gift. That’s how they get to increase their budget.”
As reported in the Topeka Capital Journal
