GUEST COLUMN, David Trabert, Kansas Policy Institute
Contrary to claims by some local elected officials, appraisers aren’t to blame for property tax increases. Elected officials set mill rates that determine property tax revenue for cities, counties, school districts, and other taxing authorities, and they alone are responsible for property tax hikes.
Elected officials overseeing 62 percent of all local taxing authorities dropped mill rates to the revenue-neutral level and offset valuation increases, so they are collecting the same dollar amount of taxes this year as they did in 2024. Many of the rest kept the mill levy steady and are collecting a lot more money this year. They may claim they are ‘holding the line’ on property taxes and try to blame the appraiser for large tax increases, but they know they aren’t being honest with taxpayers.
Elected officials blaming the appraiser and claiming to ‘hold the line’ while taking in millions more in property taxes is just one of several property tax myths in Kansas.
Blaming tax increases on untaxed federal property
Leavenworth County Commissioner Jeff Culbertson recently blamed high taxes on property that’s exempt from taxation.
“Leavenworth County is about 56 percent property tax exempt. Only about 44 percent of you pay all the bills. That in itself has you paying twice as much as you should be paying.”
If Leavenworth County commissioners want to collect the same amount of tax as a county with more taxable property, they would need a higher mill rate to do so. However, a higher portion of tax-exempt property is not the reason that Leavenworth County increased its property tax revenue by 437 percent since 1997. The primary reason for such a large tax increase is that county commissioners authorized spending that is six times greater than the combination of inflation and population.
Leavenworth County property tax increase
What’s more, Leavenworth County has more taxable property per resident than some counties of similar size. Reno County has $12,094 per resident in taxable assessed valuation, and Riley has $11,696 per resident, while Leavenworth County has $13,222 per resident.
One mill of property tax generates $1.1 million in Leavenworth County compared to about $743,000 in Reno County, yet Reno County has a lower mill rate of 35.504 versus 37.779 for Leavenworth County.
Riley County’s mill rate of 38.055 is less than 1 percent higher than Leavenworth’s, even though Riley County has 24 percent less valuation per resident, and one mill of property tax generates over $200,000 less.
Elected officials decide their mill rates based on how much they want to spend and the tax needed to pay for it. Again, spending decisions drive tax decisions.
Beware of rankings that lack perspective
A recent story in the Linn County News, citing SmartAsset.com, said the county has “the second lowest property tax average in the state,” on residential property.
SmartAsset.com doesn’t explain its methodology, but its calculations differ from the data provided by the Kansas Department of Revenue. The table below shows that the effective tax rate (tax divided by appraised value) on residential property in Linn County is 1.24 percent, making it the fifth-lowest in the state. The effective tax rate on all property in Linn County is 2.11 percent; that is above the state average of 1.94 percent and higher than 18 other counties.
By the way, Linn County News noted Linn County’s state ranking, which sounds good, but that doesn’t mean Linn County has low residential taxes because rankings are relative. According to SmartAsset.com, Linn County’s ETR is 18 percent above the national average, and its real ETR is 38 percent above the national average (if SmartAsset’s national average is accurate).
Further, it may be tempting to assume that Linn County having the fifth-lowest effective tax rate on residential property means local officials are being more efficient, but something else is at play.
Residential property is assessed (taxed) at 11.5 percent of appraised value, but other property classes have much higher assessment ratios. Utility property is assessed at 33 percent of appraised value, commercial and industrial property is assessed at 25 percent, and agricultural property and mineral leasehold property are assessed at 30 percent. This means that counties with lower proportions of residential property will effectively have more property to tax.
Linn County’s property distribution is 60 percent utility, 27 percent residential, and 10 percent from agriculture, commercial, and industrial property. Most of the other counties with the lowest ETR on residential property have similar taxing advantages. Pottawatomie, Cherokee, Brown, and Coffey have much lower portions of residential property than the state average of 57 percent. Miami and Johnson counties have more than 70 percent residential, but their advantage seems to be the total volume of taxable property.
Lower mill rates don’t indicate efficiency
Overland Park city council members routinely brag that having a lower mill rate than other cities means they are wisely spending taxpayer money. A quick examination of the data shows there is no correlation between the two, of course, but that’s their justification for enormous spending increases.
The amount of property that people pay is a function of two variables – assessed valuation and the mill rate. Everyone in a city pays the same city mill rate, so you pay higher taxes than your neighbor if your valuation is higher.
It’s the same for cities on the receiving end, and in this case, Overland Park has a huge advantage over Olathe, as we explained in a 2021 analysis.
A mill generates one dollar of tax for every $1,000 of assessed valuation. Overland Park had $4 billion of taxable assessed valuation, according to the Johnson County Appraiser, but Olathe only had $2.1 billion. One mill of property tax, therefore, generates about $4 million while in Olathe, one mill produces $2.1 million.
If both cities wanted to collect $50 million in property tax, Olathe would have to charge 24.2 mills, but the Overland Park rate would be 12.5 mills.
The volume of assessed valuation that happens to be in Overland Park is the primary reason that their mill 2021 rate of 13.554 was so much lower than the 24.440 mills charged by Olathe.
It has nothing to do with Overland Park being efficient.
Trust but verify
President Ronald Regan’s admonition about dealing with Russia is also good advice for property tax issues: trust, but verify.
Actually, you probably should go straight to ‘verify’ if someone is trying to justify raising your property tax. They may not know they are giving you bad information (like in Leavenworth County), but it may be another property tax myth.
