Kansas House committee studying quarterly property tax payment option

The lobbying arm of the League of Kansas Municipalities introduced skepticism Monday into a House committee discussion about allowing counties to enter into a system of quarterly payment of individual property taxes.

Under current Kansas law, people with property tax debt can meet their obligation in a lump sum or in two equal payments. The House Vision 2020 Committee was conducting a hearing on House Bill 2546, proposed by Rep. Tom Sloan, R-Lawrence, that would create a four-payment option. The committee is expected to bring the bill to a vote next week.

Larry Baer, general counsel to the municipalities organization, said the shift by county governments to a new payment model with passage of the bill might trigger revenue dips following the traditional Dec. 20 and May 10 collection dates in Kansas.

“This could lead to cash flow issues with cities that count on the majority of tax payments being received on the traditional dates,” Baer said. “Often, debt service payments are tied to these distribution dates.”

He said the financial impact of consumer conduct on payment of property taxes would be difficult to anticipate in early years of implementation and that uncertainty would complicate the budgeting process. These unknowns “give us concern” and should prompt the House committee to give “careful consideration” to the bill, he said.

Sloan, a member of the Vision 2020 committee, told colleagues on the panel the flat or declining level of state financial support for local units of government would put pressure on cities and counties to rely more on property tax revenue to fund basic services.

“The fundamental issue going forward to state and local governments in an age of declining income tax revenues will be how to fund essential and desired services from fee, property tax and sales tax revenues,” Sloan said.

He said increases in property tax rates or property valuations will result in higher tax bills, and the current system requires counties send property tax bills to Kansans one week before Christmas each year.

Adoption of the four-payment approach by county governments and an individual's voluntary participation in this new option would smooth out compliance with tax obligations, Sloan said.

“It’s an intriguing little bill,” said Rep. Larry Campbell, an Olathe Republican and chairman of the Vision 2020 committee. “This is optional. It could reduce delinquencies.”

He said problems with late payment of tax bills might be alleviated if people were able to deal with property tax payments with four payments rather than one or two.