The Kansas Statehouse in Topeka

Topeka ? One of the first bills that Kansas lawmakers will deal with after they return to the Statehouse April 27 could have a big impact on local property taxpayers, as well as local governments that rely on property taxes to fund public services.

House Bill 2088, which is now in a House-Senate conference committee, would move up by one year the effective date of a property tax lid that is currently scheduled to take effect in 2018.

But a lobbyist for the Kansas real estate industry said he thinks a compromise has been reached that will satisfy most of the concerns that local governments have had with the bill, and he hopes it will be acted upon quickly once lawmakers return.

“We had a handshake agreement,” said Luke Bell, who lobbies for the Kansas Association of Realtors, the group that has been pushing hard for a new tax lid. “That agreement was handed out to the conference committee before we left town (March 24). We support the agreement. I believe the League (of Kansas Municipalities) and the (Kansas Association of) Counties do as well. I think their exact wording was, we don’t like the property tax lid, but the agreement is an improvement over current law.”

Officials from the League of Kansas Municipalities and the Kansas Association of Counties were not available for comment Friday.

Under current law, which was enacted last year, cities and counties would have to receive voter approval before they could increase their property tax revenues beyond the rate of inflation. That law is scheduled to take effect in 2018.

That was inserted into an omnibus tax bill late in the session last year as an amendment offered on the floor of the Senate, even though there had been no committee hearings or public testimony on the subject.

That law angered many local officials, including those in Lawrence and Douglas County, because it makes no allowance for increases in property value, even increases that result from growth and new construction.

The Realtors association came back to the Legislature this year, hoping to move up the effective date so it would take effect this summer. But this time it ran into stiff opposition from local governments, including the city of Lawrence which objected to the state imposing any kind of tax lid.

“The City of Lawrence believes strongly that local spending and taxing decisions should be left to local officials representing the citizens that elected them,” the city said in written testimony this year. “Just as the Governor and the Kansas Legislature cry foul when the federal government tries to interfere with states’ rights, we object to the Legislature’s infringement on local control.”

Under the compromise language, which is still waiting final approval by the conference committee, cities and counties would still be able to see certain kinds of property tax growth without having it count toward their cap. Among those are:

• New revenue resulting from new construction, or from remodeling and renovation of existing property.

• New taxes raised to pay for public safety functions such as police, fire and emergency medical services, would also be exempt, or for disaster recovery.

• New revenue that results when property tax abatements that have been granted for economic development purposes expire and those properties come back on the tax rolls.

• New property tax revenue used to pay principal and interest on general obligation bonds.

• New revenue needed to comply with new state or federal mandates.

• And new revenue needed to pay the cost of legal settlements or to offset the loss of federal aid when the city or county is still contractually obligated to provide a service.

The compromise also would calculate inflation by using a five-year running average of increases in the Consumer Price Index, which is intended to smooth out much of the volatility that can occur in the annual inflation rate.

Lawrence’s finance director Bryan Kidney said those changes make the bill better, but he and other city officials would still prefer that state government leave the business of managing local governments to local officials.

“The public safety (exemption) was a major issue in my head, especially in light of the over-hire request that the police chief just recently requested and was granted a portion of those” he said. “Those are real dollars. That’s a real impact to our service levels that, if we’re not able to do, becomes a real issue.”

Local officials had also complained that the law, as it currently stands, doesn’t allow enough time for them to plan their budgets and decide whether to call an election to request higher property tax revenues. That’s because cities and counties typically don’t receive final reports on their assessed valuation until July 1, and they are required by law to finalize their budgets for the following year in mid-August.

Under the compromise, the deadline for county clerks to notify cities and counties of their assessed valuation would be moved up to June 15. And cities and counties could delay final adoption of their budgets until Oct. 1 if they need to wait for the results of an election.

In addition, they would have the option of calling a special election, or conducting an election by mail ballot, instead of holding those votes during either the August primary or November general elections.

Bell said the conference committee had tentatively agreed to the compromise when it met the afternoon of March 24, the last day of the regular session. But there was not enough time to finalize the language that afternoon before lawmakers adjourned and went home for their month-long spring break.

He said he expects the conference committee to act quickly once lawmakers return on Wednesday, April 27, for the start of the wrap-up session.