So far in 2021, several states have followed Utah’s lead by passing legislation modeled after our property tax laws, known as “Truth in Taxation”. After years of painful and relentless property tax hikes, taxpayers in Nebraska and Kansas were victorious in getting legislators to pass “Truth in Taxation” laws modeled after what Utah has had in place for over 30 years.
In Kansas, the House and Senate passed Senate Bill 13 by overwhelming bipartisan majorities and the Democrat Governor, Laura Kelly, signed it into law.
SB 13 was modeled after Utah’s 1985 law and will bring transparency to the area of property taxes. Just like in Utah, when new property values are set this year, mill levies will automatically be reduced so that the new valuations bring in the same dollar amount of property tax to cities, counties, school districts, and other taxing entities as in 2020. If local officials want to increase the revenue-neutral mill levy, they must notify citizens of their intent, hold a public hearing to accept input, and then vote on the entire property tax increase they impose. SB 13 also does away with the so-called property tax lid, which required public approval to increase property tax by more than inflation. The lid was rendered almost meaningless, however, by a long list of exemptions that allowed cities and counties to avoid the public vote requirement. The new Truth in Taxation law has no exemptions.
There is already good news coming out of Kansas after the passage of the bill. As highlighted in this article, several taxing entities that have hiked taxes massively in years past are already having a change of heart.
In Nebraska, with a unanimous final vote, the Legislature passed Legislative Bill 644 this year, which also provides transparency and notice to taxpayers when a government entity wants to raise property taxes.
Your Utah Taxpayers Association did an interview with the Platte Institute in Nebraska discussing the legislation (to view the interview click HERE). LB 644 enacts notice requirements for government entities when they want to raise property taxes. Those entities need to send notice to property owners detailing the time, date and location of the hearing as well as details on the proposed tax increase.
Those details include the amount and percentage increase in taxes the property owner will face for each $100 of value as well as budget increase information for the government entity proposing the increase.
Before Kansas’ recent reforms, Utah has received the most attention for our pro-taxpayer property tax transparency measures. Since its enactment in 1985, Utah’s Truth in Taxation law has helped the Beehive State maintain a low property tax burden.
When the law was passed, Utah had the 24th lowest property taxes in the country, but thanks in large part to the Truth in Taxation law, Utah has improved to 14th lowest today. This has been one of the policy reforms that has kept Utah ranked #1 of all 50 states 13 years in a row for best economic outlook in every edition of the Rich States, Poor States report from ALEC each year.
Your Utah Taxpayers Association continues to receive inquiries from many other states looking to reform property tax laws in order to push back on relentless property tax hikes. Iowa has been making a big push for reform and TEF Iowa recently recorded an interview with the Association.
Montana has also reached out seeking more information on how the law works and has requested the association make a presentation to their interim legislative committee in September.