May brought a deadline for property tax payments, and of all the prudent words woven into the Kansas Constitution, no string of them has provoked more trouble than those establishing this levy. Among all the articles and sections in that document, a dozen words have incubated both the tissue and torment of government in Kansas:
“…shall provide for a uniform and equal rate of assessment and taxation.”
At Wyandotte near the end of July, 1859, the Legislature enacted the Constitution, including Article 11, Section 1 – hatching, in a single paragraph, the property tax. This principle was so important that it had been chiseled into territorial law 18 months before Kansas joined the union of states.
Pioneer legislators believed that a tax on property was essential to fuel public services in growing settlements across the plains. It was the way to carve roads from the trails, to put bridges over rivers and streams. It would pay the sheriff and the schoolmaster. It kept the fire wagon ready.
Assessment of a “uniform and equal” levy was to spread the cost of community maintenance and improvement. It was thought fair, then, because the extent of the tax reflected the productivity of the land, not its market value, real or imagined. After all, productivity of land was the promise of Kansas.
Alas, promise is fickle. A tax once written into the Constitution to help make life more livable in town and township came to be a source of exasperation. The property tax had become the scorn of farmers, merchants, nearly anyone who owned even a sliver of property.
Over the decades since the Homestead Act (1862), land became a formative resource for farmer, rancher, developer and citizen leader, town booster and civil servant. The value of property would be increased by “improving” it. Farms became productive and ranches fattened cattle. Townships sprouted towns and towns became cities, and the larger ones would gobble nearby communities or breed new ones, to be called suburbs.
Land was valuable for what was under it as well as what could be grown in it or built on top of it. Coal, oil and gas had been discovered as early as 1855 but continuous commercial ventures were not producing until the 1890s in eastern Kansas. Oil and gas were not commercial in the west until the 1930s.
Over time, the value of land fluctuated against demands and uses so unpredictable that no law of appraisal could reflect reality. Commerce now included coal, oil and gas. Irrigated farm land and massive feed lots in the west and the sprawl of suburbs in the east compounded the complexities. Even the keenest assessors would discover that they could only hack at the edges of the bewildering thicket of land use and value. The property tax had become the torture of politicians and constituents. Its practical application defied law, flying in the face of the Constitution of which it was part.
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In 1980, a year into John Carlin’s first term as governor, the Santa Fe Railway sued the Kansas Department of Revenue, claiming that the railroad was assessed for property taxes at rates higher than other businesses.
At that time, property was to be appraised at “fair market value” and assessed for taxing at 30 percent of that value. That didn’t happen. Only utilities paid taxes on property assessed at 30 percent because in their case, the state – not counties – did the assessing. County appraisers could never keep up with the 30 percent law. The result was that the ratio of sale prices (market value) to appraised value – known as the sales-assessment ratio – rarely approached even a double digit, much less 30 percent in any city, township or county.
Four years after the suit was filed, the railroads and the state division of property valuation arranged through federal court a process by which the railroads were taxed at rates lower than proscribed by law. The courts ruled that railroads were entitled to lower rates because county assessments were far below state levels.
That seemed to settle the trouble between railroads and the state. But what of the others with cause for complaint?
In 1986, the last year of his two terms as governor, Carlin spent much of his time campaigning for six amendments to the Kansas Constitution. One of them ordered (rather than permitted) the Legislature to rewrite farmland assessment laws and enact use-value farmland appraisals; thus, farmland would be appraised by its ability to produce income. The amendment also provided for classification of real and personal property with assessment at different percentages of value; farm machinery and equipment, merchants’ and manufacturers’ inventories, and livestock were exempt.
The voters approved. Change was on the way.
(Next: Reappraisal)
