COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:3064H.06C Bill No.:HCS #2 for HJR 78 Subject:Taxation and Revenue - General; Constitutional Amendments; Property, Real and
Personal; State Tax Commission; Department of Revenue; Housing; Elderly
Type:Original Date:March 8, 2024Bill Summary:This joint resolution proposes a constitutional amendment relating to real
property tax assessments.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2025FY 2026FY 2027
General Revenue*
$0 or (More than
$8,000,000)$0 or Unknown**
Total Estimated Net
Effect on General
Revenue
$0 or (More than
$8,000,000)$0$0 or Unknown**
*The potential fiscal impact of “(More than $8,000,000)” would be realized only if a special
election were called by the Governor to submit this joint resolution to voters.
**Oversight notes the potential savings to the General Revenue Fund is from reduced Senior
Property tax credits issued if the proposed changes in the base year result in lower property tax
bills for qualifying seniors in the future. Oversight assumes the potential savings will not reach
the $250,000 threshold in the next three years because the change in the base years will be
relatively small until future years.
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027Blind Pension Fund* $0$0$0 or (Unknown)Total Estimated Net
Effect on Other State
Funds $0$0$0 or (Unknown)
*Oversight notes the Blind Pension Fund may experience a decrease in revenue relative to what
it would have received under current law. Oversight assumes the potential savings will not reach
the $250,000 threshold in the next three years because the change in the base years will be
relatively small until future years.
Numbers within parentheses: () indicate costs or losses. L.R. No. 3064H.06C
Bill No. HCS #2 for HJR 78
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ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027Total Estimated Net
Effect on All Federal
Funds $0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2025FY 2026FY 2027Total Estimated Net
Effect on FTE 000
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2025FY 2026FY 2027Local Government$0*$0$0 or (Unknown)
*Transfers and costs net to zero if the Governor calls a special election. L.R. No. 3064H.06C
Bill No. HCS #2 for HJR 78
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FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Revenue (DOR) note this proposal modifies how residential
property assessment values will be calculated in the future. DOR is not directly impacted by this
proposal. However, should seniors that currently receive the Senior Property Tax Credit (PTC)
pay less or more in property tax under this proposal, which could change the amount of the PTC
credit they receive. In FY 2022, there were 56,457 senior homeowners that claimed $33,428,661
in PTC credits. The impact is unknown.
Officials from the State Tax Commission have determined that this bill proposes residential real
property be valued at the most recent assessed value. This bill also proposes that the increase of
real residential property is the Consumer Price Index percentage rate of increase or 2%
whichever is less. This proposal has an unknown fiscal impact on the State Tax Commission,
however the limitation on assessment growth may negatively impact revenues for school
districts, counties, cities, fire districts and other local taxing jurisdictions supported by property
tax revenues.
Additionally, restrictions on assessment growth may create disparities and inequities over time
among residential properties and categories of homeowners, potentially shifting a greater share
of the tax burden from one class of homeowner to another. A newer home's true market value
used for assessment may increase far more than an older home or vice versa depending on
market conditions. An assessment limit may impact assessment growth and over time potentially
create a large disparity.
Officials from the City of Kansas City assume the proposed legislation has a negative fiscal
impact of an indeterminate amount.
Officials from the Callaway County SB 40 Board assume the proposed legislation has a fiscal
impact of an indeterminate amount.
Officials from the Lincoln County Assessor note by limiting the value increases this will throw
counties out of tolerance with ratio studies it sends to the State Tax Commission - also stunting
tax base growth to some taxing entities
The County Employees’ Retirement Fund (CERF) has reviewed HCS#2/HJR 78
(3064H.06C). CERF’s review of this bill would indicate that it may result in reductions in
contribution revenue to CERF of an unknown amount annually. A certain portion of the moneys
that are used to fund the County Employees’ Retirement Fund are tied to the collection of
property taxes. Data is not available to quantify how changes to real property assessments under
HCS#2/HJR 78 would impact contribution revenue but CERF assumes there would be a negative
impact. L.R. No. 3064H.06C
Bill No. HCS #2 for HJR 78
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Oversight assumes this proposal would limit increases in the assessed values of individual
residential property to the change in CPI per year (estimated at 6.5% for 2022) or 2% whichever
is lower.
Oversight notes property tax revenues are designed to be revenue neutral from year to year. The
tax rate is adjusted relative to the assessed value to produce roughly the same revenue from the
prior year with an allowance for growth. Therefore, this proposal may result in a higher tax rate
relative to current law thus distributing more of the tax burden to other property owners.
Oversight notes some taxing entities have tax rate ceilings that are at their statutory or voter
approved maximum. For these taxing entities, any decrease in the assessed values would not be
offset by a higher tax rate (relative to current law) rather it would result in a loss of revenue.
Oversight notes the Blind Pension Fund (0621) is calculated as an annual tax of three cents on
each one hundred dollars valuation of taxable property ((Total Assessed Value/100)*.03).
Because this proposal reduces (or limits growth) the assessed value portion of this equation, the
Blind Pension Fund will experience a decrease in revenue relative to what it would have received
under current law.
Oversight assumes the magnitude of the impact to the Blind Pension Fund would depend on
prevailing market conditions.
Oversight assumes there could be a saving to General Revenue from a reduction the amount of
Senior Citizen Property Tax Credits claimed. Oversight will show a range of impact of $0 (no
reduction) to an unknown savings.
Oversight notes this proposal is contingent on a voter approved amendment to the Constitution.
Oversight will show the impact as either $0 (Constitutional amendment is not approved by
voters) to an unknown loss in revenue to the Blind Pension Fund and local political subdivisions
beginning in FY 2026.
Oversight assumes there could be costs for implementation and computer programming.
Oversight will show an unknown cost to county assessors to implement this proposal beginning
in FY 2026.
Oversight received a limited number of responses from local political subdivisions related to the
fiscal impact of this proposal. Oversight has presented this fiscal note on the best current
information available. Upon the receipt of additional responses, Oversight will review to
determine if an updated fiscal note should be prepared and seek the necessary approval to
publish a new fiscal note.
Officials from the Newton County Health Department, Phelps County Sheriff, St. Louis
County Police Department, Office of the State Auditor, Department of Social Services, L.R. No. 3064H.06C
Bill No. HCS #2 for HJR 78
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Branson Police DepartmentKansas City Police Department
proposal will have no fiscal impact on their respective organizations.
FISCAL IMPACT – State GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027GENERAL REVENUETransfer Out - SOS - reimbursement of
local election authority election costs if
a special election is called by the
Governor
$0 or (More
than
$8,000,000)$0$0
Cost Avoidance – possible reduction in
the amount of Senior Property Tax
Credit claims $0$0
$0 or
Unknown
ESTIMATED NET EFFECT ON
GENERAL REVENUE
$0 or (More
than
$8,000,000)$0
$0 or
Unknown
BLIND PENSION FUND Revenue Loss - loss of property tax on
property that appreciates more than the
change in CPI or 2%$0$0
$0 or
(Unknown)
ESTIMATED NET EFFECT ON
THE BLIND PENSION FUND$0$0
$0 or
(Unknown)
FISCAL IMPACT – Local GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027LOCAL POLITICAL
SUBDIVISIONS
Transfer In - Local Election Authorities
- reimbursement of election costs by the
State for a special election
$0 or More
than
$8,000,000
$0$0 L.R. No. 3064H.06C
Bill No. HCS #2 for HJR 78
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FISCAL IMPACT – Local GovernmentFY 2025
(10 Mo.)
FY 2026FY 2027Costs - Local Election Authorities - cost
of a special election if called for by the
Governor
$0 or (More
than
$8,000,000)$0$0
Costs - County Assessors - computer
programing, administrative costs, and
implementation and monitoring of
assessed value increase exemptions on
certain properties$0$0
$0 or
(Unknown)
Revenue Loss - loss of property tax on
property that appreciates more than the
change in CPI or 2%$0$0
$0 or
(Unknown)
ESTIMATED NET EFFECT ON
LOCAL POLITICAL
SUBDIVISIONS$0$0
$0 or
(Unknown)
FISCAL IMPACT – Small Business
Oversight assumes there could be a fiscal impact to small businesses if tax rates are adjusted
relative to changes in assessed value.
FISCAL DESCRIPTION
Upon voter approval, beginning January 1, 2025, this proposed Constitutional amendment
provides that the true value of all residential real property that has been maintained by the
homeowner as his or her primary residence shall be deemed to be the same value determined at
the most recent previous assessment of the property.
In a new assessment or reassessment of the primary residence the assessed valuation of such
property may be increased, provided that the increase does not exceed the change in the
Consumer Price Index or 2%, whichever is less. Such limited increase may be exceeded to
reflect the value added to the property as a result of new construction or improvements.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space. L.R. No. 3064H.06C
Bill No. HCS #2 for HJR 78
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SOURCES OF INFORMATION
Department of Revenue (DOR)
State Tax Commission
City of Kansas City
Callaway County SB 40 Board
Lincoln County Assessor
County Employees’ Retirement Fund (CERF)
Newton County Health Department
Phelps County Sheriff
St. Louis County Police Department
Office of the State Auditor
Department of Social Services
Kansas City Police Department
Branson Police Department
Julie MorffRoss StropeDirectorAssistant DirectorMarch 8, 2024March 8, 2024