Douglas County legislators on Wednesday spoke against a move to repeal the mortgage registration tax, saying it would shift more of the tax burden onto property taxes.
"When you cut anything, someone else is going to have to pick it up," Rep. Barbara Ballard, D-Lawrence, said.
State Sen. Marci Francisco, D-Lawrence, and state Reps. Tom Sloan, R-Lawrence, and Paul Davis, D-Lawrence, also spoke against the proposal.
Davis, the House minority leader who is running for governor, said the mortgage registration tax wasn't equitable but added that removing it will short counties statewide $47 million. That could lead to increasing property taxes, which he said most people oppose.
The legislators' comments came during a Lawrence Chamber of Commerce pre-legislative session breakfast during which representatives of local governments brought their concerns to local legislators.
Douglas County Commission Chairman Mike Gaughan said repeal of the tax, paid when mortgages are filed with the county, would deprive the county of its third largest revenue source after the property tax and sales tax. The mortgage tax brought in $1.9 million in 2013, he said.
The Kansas Bankers Association and Kansas Realtors Association are lobbying legislators to eliminate the mortgage registration tax, arguing that it is unfair because those who pay cash for a home avoid paying the tax. Additionally, borrowers that use government-sponsored lenders are not subjected to the tax.
On a $150,000 home, the tax adds an additional $390 to the borrower's closing costs.
In telephone interviews, leaders of the legislative tax committees said repeal of the tax will be debated during the 2014 session that starts Monday.
"That is an issue that is definitely going to be up and running as soon as we get back in session," said Senate Tax Committee Chairman Les Donovan, R-Wichita.
State Rep. Richard Carlson, R-St. Marys, and chairman of the House Tax Committee, said he expected the inequities of how the tax is assessed and the effect repeal would have on counties would be discussed during debate on the bill.
"Those are the things we will have to look at," he said.