Kansas policymakers are considering a levy limit as a potential solution to ease property tax burdens. Following income tax reform and relief enacted in 2024, the focus has shifted to property taxes, with proposals for limitations on the table. Senate Concurrent Resolution 1603, which aims to create an assessment limit, passed the Senate on February 6th. Additionally, H.B. 2011 proposes a levy limit on the statewide school finance levy.
Currently, Kansas lacks a state-imposed levy or rate limit. Under the "Truth in Taxation" policy, local jurisdictions must set budgets so that property tax collections do not exceed the previous year's level unless they notify taxpayers and hold public hearings.
A true levy limit would require voter approval for increases above set limits. Kansas had such limits until 2021 when they were repealed due to criticism over exemptions that weakened their effectiveness.
"A tighter levy limit without exemptions would be a structurally sound reform," experts suggest. This could allow growth for inflation and new construction only or restrict year-over-year collections growth to reduce real property tax collections over time.
The proposed assessment limit under S.C.R. 1603 would cap increases in taxable appraised value at three percent annually but is criticized for potentially introducing economic distortions. It could increase market values of older homes while making new construction more expensive.
Assessment limits are seen as less ideal because they create gaps between taxable appraised value and market value over time and don't prevent jurisdictions from raising mill levies.
H.B. 2011 includes a strict levy limit applying only to the statewide school finance levy starting in tax year 2025. The legislation proposes increasing revenue transfers from the State General Fund without raising state income or sales taxes, which might put upward pressure on these rates in the future.
An alternative approach could account for inflation and new growth since governments should expect increased revenue from additional homes and homeowners.
As Kansas considers long-term property tax relief options, experts recommend a well-structured, exemption-free levy limit as an effective reform strategy.
