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Minutes for HB2668 - Committee on Taxation
Short Title
Establishing the property tax relief act and providing an expiration for the selective assistance for effective relief credit and the homestead property tax refund.
Minutes Content for Mon, Feb 24, 2020
Adam Siebers, Assistant Revisor, provided an overview for HB2668 that would create a new refund program for property taxes. The bill will provide a two classification system for those individuals who are less than 65 years of age and for those that are 65 years of age and older. The bill will eliminate the Selective Assistance for Effective Senior Relief (SAFESR) and the Homestead Property Tax Refund after tax year 2020. The Property Tax Relief Act would be available to residential owners earning less than $50,000 a year. The individual can either have the refund applied to their property taxes or receive the refund directly.
Kathleen Smith, Kansas Department of Revenue provided information on the fiscal note for HB2668 stating the bill would decrease State Revenues in FY2022 by $57.1 million, FY2023, $71.3 million and FY2024, $85.8 million. HB2668 would affect around 336,000 taxpayers which includes those that are in the homestead and the Safe Senior Program as well.
Proponents:
Representative Esau testified for HB2668 stating the question asked by senior citizens in her district who live on a fixed income is what can be done about our property taxes. She noted there is a problem with rapidly increasing property values. The mill levies in her district are staying stable but the property tax in the last five years has gone up 25% which is approximately $900 over a five-year period. She noted HB2668 is a way to provide some tax relief for senior citizens and lower income residents that are unable to absorb the increasing tax increases (Attachment 1).
Representative Croft testified for HB2668 using a whiteboard to show the components of the Safe Senior Program, the Homestead Program, and the Golden Years Program to be combined into one program. He also explained to the Committee how the property tax rebate works along with the key components of the bill. HB2668 would be available to property owners with a maximum income of $50,000 annually and would be adjusted for inflation each year beginning in 2022 (Attachment 2).
In response to questions, Representative Croft stated HB2668 would start at the current age of the taxpayer and does not go back to age 65. The rebate for this bill comes from the State General Fund and does not affect local taxes. This bill would replace the Safe Senior Tax Act, the Homestead Act as well as the Golden Years. There is no cap on the valuation of the home. The property tax rebate is not taxable.
Dave Trabert, Kansas Policy Institute, testified for HB2668 stating the bill provides much needed property tax relief for homeowners especially for those considered as senior citizens. Kansans have many complaints about property tax and being taxed out of their home is one of the most common grievances. He pointed out an e-mail in his testimony that he received last week from a senior citizen explaining due to high property taxes, the couple is considering moving out of state unless something is done to stop the relentless mining of senior retirement funds by this state. Mr. Trabert stated for the record property taxes in Kansas increased 151% between 1997 and 2018 which is more than three times the rate of inflation over the same period. He noted Governor Kelly's Tax Council is want to revive the Local Ad Valorem Tax Reduction as a solution to high property taxes. The program didn't work the last time and won't provide tax relief now (Attachment 3).
Neutral:
John Lee, Tax Simple Center testified for HB2668 and provided a formula for the bill. (Attachment 4).
Hearing closed on HB2668.
