In my opinion
Holub objects to tax exemption
The House Taxation Committee voted March 8 to go forward with HB 2285 to remove certain types of business fixtures from the tax rolls. Under the pretext of clarifying a law that has existed for more than 100 years, the bill redefines fixtures on behalf of two companies.
This bill was introduced after being requested by two companies (registered in Delaware, which has no corporate taxes, but doing business in Kansas) whose 10-year property tax abatements had expired.
Within three months of losing their appeals to the Kansas Court of Tax Appeals, they had enough clout to get legislation introduced to “clarify” the law, which will result in a large portion of their property being non-taxable.
The bill as re-written will benefit about 30 businesses that will receive a significant tax break. Local governments will lose approximately $75 million dollars of tax revenue statewide. The loss can be compensated for only with levy increases on residential and small business property owners.
Under similar circumstances, a bill was passed in 2006 with the stated purpose of “encouraging business expansion and business relocation to Kansas.”
This bill also cost local governments millions of dollars. Research has indicated that no one at the state level seems to be monitoring to see if the stated purpose of this bill was achieved.
I was able to find out that since the bill became law, the number of mass layoffs (50 or more people) by Kansas businesses has dramatically increased, according to the Kansas Labor Information Center. To this day it is above the 2006 levels.
These exemptions and others have done nothing but shift the tax base and thus the burden.
In 1996, residential real estate properties constituted 37.9 percent of the tax base. This has grown to 48.02 percent in 2012 and will exceed 50 percent if the new bill passes.
It can be argued the federal government is spending this country into debt, but Kansas is “exempting” its citizens into debt by accommodating large and powerful companies.
Rep. Kasha Kelly, a tax committee member, was quoted as saying “counties should reduce spending and tighten their belts.”
I think Kansas citizens would be better served if the Legislature stopped “tightening the noose.”