A new law moves up the implementation of a spending cap for Kansas cities and counties. It's an effort to prevent assessing jurisdictions from getting windfall tax revenues when property values rise.
Senate Substitute for House Bill 2088 moves up the implementation of a law first approved in 2015. The spending cap will now go into effect January 1, 2017 rather than January 1, 2018.
The legislation stipulates that starting with next year's budgets, local governments will have to limit their spending increases to a modified consumer price index to be calculated by the state. Any money collected beyond that will have to be refunded through property tax cuts.
If a city or county wants to increase its spending by more than the state-allowed percentage, it will have to schedule a public election and get voter approval.
There is a long list of exemptions associated with Senate Sub. for HB 2088. Under the new language, exemptions will apply for property tax increases attributable to:
Construction, remodeling, or renovation
Increased personal property valuation
Real property located within added jurisdictional territory
Real property that has changed in use
Certain bond and interest payments
Certain special assessments
Court judgements or settlements of legal actions against cities or counties
Expenditures mandated by federal or state law
Expenses relating to certain federal, state, or local disasters or emergencies
Expenditures for increased police, fire, or emergency medical services
Increases based on legislative action, judicial action, or Board of Tax Appeals rulings
Expiration of property tax abatements, tax increment financing districts, rural housing incentive districts, neighborhood revitalization areas, or other property tax rebate or redirection programs
An additional exemption from the mandatory election requirements applies when property tax dollars levied have declined in one of the three preceding years and the proposed increase for the upcoming year does not exceed the average rate of inflation for the three preceding years.