League of Municipalities warns rising costs and exemptions squeeze city budgets

Spencer Duncan, government affairs director for the League of Kansas Municipalities, told a legislative committee that cities across the state face rising costs for roads, water infrastructure, insurance and public-safety equipment and that the current revenue mix leaves many cities exposed.

Duncan said cities collect roughly 41% of revenue from property taxes, about 21% from sales taxes, 19% from utility and franchise fees, and the remainder from permits, fines and grants. He highlighted steep cost increases over the past five years — road construction up about 44%, water-line replacement up roughly 36.5%, and wages and benefits up about 21% — and said contracting shortages and insurance increases compound the pressure.

Duncan also cited statewide sales-tax exemptions totaling about $8.7 billion a year and estimated that roughly $400 million of that amount would have flowed to cities. "I can promise you if a percentage of that $400,000,000 was back in the cities, property taxes would be lower," he said, and urged the legislature to review exemptions and adopt sunset clauses so policymakers revisit exemptions periodically.

Duncan answered a question about property-tax limitation bills by stressing the need to address valuation systems that drive tax bills even when governments remain revenue-neutral, and he urged lawmakers to consider both revenue options and corrections to valuation practice.

The committee did not take action; members thanked conferees and said they would circulate the presenters' handouts for further review.