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Minutes for HB2078 - Committee on Education
Short Title
Authorizing the reduction or elimination of property tax exemption by a school district.
Minutes Content for Wed, Jan 25, 2017
Chairperson Aurand opened the hearing on HB2078.
Jason Long gave an overview of the bill. (Attachment 1) The first $20,000 of property valuation is presently exempt from taxation. This bill would allow local school boards the ability to reduce or eliminate this exemption, through a process that, if approved, would allow school boards to use the increased revenue for local special education funding, and would not be sent to the state budget.
Mr. Long responded to questions from the Committee.
Chairperson Aurand, who introduced the bill, spoke as a proponent and gave some history about how the original exemption on the first $20,000 of home valuations had been enacted 20 years ago. He stated the bill is not ideal; it is a method that would allow local school districts to pay special education costs. If every district in the state were to enact this legislation, it would allow approximately $40 million to be funneled into local schools without the legislature enacting a tax increase. The available amount would be $46 on every house worth at least $20,000. Built into the bill is the provision that if the courts decide the legislation does not meet the required equalization of education funding built into the Kansas Constitution, then the entire exemption will be removed and thus equalization will be achieved by court action. The Chairperson noted Mr. Long is working on an amendment to address the equalization issue.
There was a brief discussion by the Committee, and then Chairperson Aurand invited opponents to speak.
Mark Tallman testified against the bill, stating his organization's major objection is the inequity of raising money in a piece-meal fashion. The bill offers a funding method that appears attractive, however, it is highly unlikely that it would be acceptable to the Kansas Supreme Court. He stated the Legislature must adopt a higher foundational amount per pupil using a mix of income, sales, and property taxes. (Attachment 2)
Patrick Vogelsburg testified against the bill stating the legislation as written would create a patchwork of confusing property taxes throughout the state and the approval/protest process stated in the bill places an unfair burden on the property owners. He asked the Committee leave the exemption alone, as the present tax burden is not insignificant to the Kansas homeowner. (Attachment 3)
David Dorsey testified as an opponent stating schools do not spend the money that they have now. He noted there was a $911 million surplus last year and therefore this bill would raise unneeded funds from taxpayers. In addition, the Legislature is rewriting the education finance law, and this bill is out of place in the big picture. (Attachment 4)
The Committee had a brief discussion, asked questions of Mark Tallman, and Representative Rooker requested that Legislative Research staff present a picture of school district cash balances for a full year.
There being no further conferees, Chairperson Aurand closed the hearing on HB2078 and adjourned the meeting at 4:26 p.m. The next meeting will be held on February 1.
