What LAVTR Means for Kansas Counties
Local Ad Valorem Tax Reduction (LAVTR) Funding has existed in Kansas statutes for many years with the first formal introduction in KSA 79-2959 in 1965.
Per statute, LAVTR funds are calculated by a percentage of the total state sales and compensating use tax to local governments. LAVTR funding and distribution amounts are set by statute. 65 percent is distributed based on population and 35 percent is distributed based on property tax valuations.
According to the Kansas Association of Counties, LAVTR in Kansas has not received any contributions since 2003. The last time the Kansas Legislature considered funding LAVTR was 2004. What does this mean for Kansas counties? This has increasingly placed the burden of revenue generation on local property taxes, particularly in counties that do not have a large retail presence to allow them to generate funds to supplement the county budget through a countywide sales tax. Kansas counties and cities have lost over $1.7 billion in revenue from LAVTR alone since 2001 through 2022 according to the Kansas Association of Counties.
How does LAVTR benefit Kansas residents? Through property tax relief via a reduction in the mill levy. With LAVTR in place, monies sent from the state of Kansas to local governments are directly applied to lowering property tax levies. This time-tested partnership—started in 1965 and stopped in 2003—provides dollar for dollar reductions in property tax bills. This partnership is a far better way to influence property tax rates than by arbitrary controls such as caps on assessed valuations or tax and spending lids on local governments said the Kansas Association of Counties.
During the 2023 Kansas Legislative session, LAVTR discussions resurfaced after a nearly 20-year silent void. An amendment to the budget was proposed and passed by the House to fund LAVTR, but ultimately the amendment failed to move forward in the Senate.
The Kansas Association of Counties has created and launched a comprehensive LAVTR Advocacy Toolkit for Kansas Counties to assist in educating the public, legislators and Kansas county personnel on what LAVTR is, how LAVTR works and why the Association of Counties says funding LAVTR is a benefit for all.
The Kansas Association of Counties is a quasi-public agency, which seeks to advance the public interest by promoting effective, responsive county government in Kansas. Founded in 1975, as an instrumentality of its member counties, KAC serves county governments through legislative representation, technical assistance, leadership and professional education.
(Information courtesy KAC.)