Kansas school property taxes lower than most other states

Local property taxes for public schools in Kansas are lower than most states in the region and nation, even including the state 20 mill levy.

Property taxes are usually considered the most unpopular tax among voters and taxpayers, and concerns about higher property tax rates have been cited by some as a reason to amend the Kansas constitution’s school finance provisions. However, national data shows Kansas schools rely less on property taxes than most neighboring and Plains states and the national average.

Data from the most recent Public Education Finance report for 2016 from the U.S. Census Bureau shows that Kansas raises $2,191 per pupil from local property taxes, 37^th out of the 43 states that reported revenue from local property taxes. That is lower than all bordering states (Colorado, Nebraska, Missouri and Oklahoma) and other Plains states (Iowa, Minnesota, North and South Dakota).

That number for Kansas does not include the statewide 20 mill levy, which is mandated by the state legislature, collected by the state and redistributed to school districts as state aid. National data does not indicate if other states fund schools with state aid from property taxes. However, even if including $1,212 per pupil from the statewide mill levy is added, Kansas school property taxes are still below all neighboring and Plains states except Minnesota and Oklahoma, and over $600 below the U.S. average.

Why are Kansas school property taxes so low? First, because overall Kansas school funding is relatively low. In 2016, total funding per pupil ranked 30^th in the nation, over $1,500 below the national average; lower than Iowa, Nebraska, Minnesota and North Dakota in the region, and just $120 more than Missouri.

Second, property taxes are also lower in Kansas because of deliberate state policy to rely more heavily on state revenues. Kansas schools overall receive just 27.4 percent of total revenue from local sources. That is a lower percentage that any state in the region, compared to Colorado (49.5 percent), Iowa (39.1 percent), Minnesota (29.2 percent), Missouri (49.2 percent), Nebraska (58.7 percent), North Dakota (34.8 percent), Oklahoma (41.0 percent) and South Dakota (56.3 percent), as well as the U.S. average (44.5 percent). This fact also explains why Kansas ranks high in state aid per pupil (as opposed to local revenues) and K-12 aid amounts to about 50 percent of the state general fund budget, as it has since the mid-1990’s. Relative to other states, a portion of state aid effectively functions to lower property taxes rather than increase school funding.

Third, school property taxes are lower due to state equalization aid. Three major state aid programs – Capital Improvement aid for bonds ($190 million) Capital Outlay aid ($60 million) and Local Option Budget aid ($480 million) do not provide districts with any additional spending power; instead, they offset local property tax requirements. Without this funding, property taxes would have to be much higher in low wealth districts or spending in these areas reduced.

A significant amount of state equalization has been passed by the Legislature because of Kansas Supreme Court rulings on funding equity. Other states have different constitutional language and court opinions.