Kansas Senate committee report advances bill to remove 1.5 mills in state-collected property tax, shift funding to general fund

Senate leaders in the committee of the whole advanced Senate Bill 35 on Jan. 28, 2025, a proposal that would eliminate the state's 1.5-mill property tax and replace that revenue with transfers from the state general fund.

The bill, as explained on the floor by Senator Barbara Tyson (Senator from Linn), would remove the 1.5 mills that the state collects in property tax — "the 1 mil is currently for regents and the half mil is for state buildings," Tyson said — and create a formula to replace that revenue from the general fund.

The bill's fiscal effects and mechanics were a central focus. Tyson told senators the committee adjusted the fiscal calculation for the regents from a simple annual increase to a 10-year average; she later offered and won an amendment to base that 10-year average on all property rather than only residential property. Tyson said, "This money would be made up through an equation and put into the state general fund." The session transcript records the committee-amended bill moving forward for passage as amended.

Senators asked for and received multiple clarifications on how the transferred funds would be used. Senator Feig (Senator from Butler) asked whether the fund — increased in committee from $50 million to $56 million — can be spent on new construction or debt service. Tyson replied that the legislation does not change how the regents currently may use the fund; the bill only changes the funding mechanism and the money would go into the existing Kansas Educational Building Fund.

Fiscal estimates discussed on the floor showed two types of impacts. Senators warned counties would see a reduction in locally collected property-tax revenue (several senators cited approximate ranges of $80 million–$90 million), while the state general fund would increase its obligation to make transfers to replace that revenue. Tyson and others stressed the committee intended to leave the regents financially "harmless" by preserving their funding level under the new calculation method.

Two amendments to SB 35 were adopted in committee and approved on the floor. One (listed in the record as SO 842) added language declaring transfers made under the bill to be "demand transfers" from the state general fund. A second amendment (0860) changed the regents' 10-year averaging provision from "residential" property to "all property," a change Tyson said the regents requested and supported.

The committee reported SB 35 as amended favorably for passage, and the full Senate adopted the committee report by voice vote; no final third-reading passage vote is recorded in the transcript excerpt provided.

Why it matters: The measure would shift the immediate cost of some property-tax-supported services from local property tax collectors to the state general fund and could alter future state budgeting priorities and local tax collections. During floor remarks senators noted the timing of broader property-tax relief measures and urged careful consideration of how various bills interact.

Votes and formal actions recorded in the transcript are limited to committee-adoption steps and the adoption of committee reports and amendments by voice votes; the transcript records no final enrolled-bill passage vote for SB 35 during this session.

Ending: The committee- amended SB 35 was reported favorably to the floor and the Senate adopted the committee report, sending the measure along for further floor consideration under the Senate process. The transcript does not include a final passage vote on the Senate floor for SB 35 within the provided excerpt.