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Local Officials Warn House Bill 2745 Could Restrict Spending and Raise Bonding Costs
Summary
County and city lobbyists briefed commissioners and council members on House Bill 2745 (the new property‑tax cap and protest petition rules), warning the measure could cap spending growth at 3% or the Midwest CPI, let 10% protest petitions freeze spending to last year's level, and limit bonding capacity — raising potential credit‑rating and fiscal consequences.
County and city lobbyists told the en banc that House Bill 2745 introduces a new cap on allowable year‑over‑year spending increases and a protest‑petition mechanism that can limit a taxing jurisdiction to prior‑year expenditures if a petition meets the 10% threshold of registered voters.
"What 27‑45 does is add an additional layer," Jason Watkins, Sedgwick County’s contract lobbyist, told the commission. He described the cap as "either 3% or the CPI according to the Midwest index, whichever is less," and explained that if jurisdictions spend more than that, residents can file a protest petition. If 10% of registered voters across a taxing jurisdiction sign and the signatures are certified within a tight timeline, the jurisdiction could be limited to spending the previous year's amount rather than the higher permitted level.
Watkins and other speakers described administrative challenges in collecting and certifying petitions across multiple local jurisdictions in a short window in September and warned that the statute contains no carve‑outs for bonding or new construction. City and county finance staff said the measure could weaken the full‑faith‑and‑credit pledge used to back general‑obligation bonds and could raise borrowing costs or affect credit ratings.
"You're now losing that ability in 27‑45," Watkins said of the power to back bonds with property‑tax mill‑levy increases, adding that the change would likely result in higher interest rates and could adversely affect bond ratings.
City finance and county staff gave examples of revenue items that would be constrained under the bill, including growth‑related revenue from new construction and revenue returning from expiring tax abatements. Commissioners asked whether the bill is likely to be vetoed; presenters noted the vote counts in the Legislature were not veto‑proof and that local lobbying and legal analysis were ongoing.
The commission voted to receive and file the legislative update 5–0; staff said they would continue work on implications for budgets and bonding.
