Governor Vetoes GOP Property Tax Bill, Unveils Alternative Plan
Kelly proposed $250 vehicle tax credits, a $60 million local spending incentive and doubled residential exemptions; Republican leaders call the plan inadequate
TOPEKA, Kan. — Democratic Gov. Laura Kelly vetoed Senate Substitute for House Bill 2745 on Wednesday, rejecting a Republican-backed measure that would have created a protest petition process allowing voters to block local property tax increases exceeding the prior year's revenue, adjusted for inflation and capped at 3%. The bill passed the Senate 22-18 and the House 63-59 on March 27.
Kelly said the measure restricted local officials' flexibility to the point that it caused immediate financial disruption. Multiple school districts and local governments have already had bonds terminated by underwriters due to the uncertainty the legislation created, she said. In its place, she introduced a three-part alternative.
Kelly proposed adopting Senate Bill 378, introduced by Sen. Ethan Corson, D-Fairway, a candidate for the 2026 Democratic gubernatorial nomination and a Kelly-endorsed successor. The bill would give every vehicle owner in Kansas a one-time $250 credit when they register their car or truck, paid for with surplus money the state has set aside in its rainy-day savings account.
A second piece of the plan would set aside $60 million in state funds to reward cities and counties that keep their yearly spending growth at 3% or less — essentially offering local governments a financial incentive to hold the line on budgets rather than passing higher costs on to property owners.
The third provision targets the property taxes Kansans pay to fund public schools. Currently, the state exempts the first $75,000 of a home's value from that portion of the tax bill. Kelly's plan would double that to $150,000, meaning most homeowners would see a direct reduction. The governor estimated the change would benefit more than 700,000 households. To avoid cutting school funding, the state would backfill the lost revenue from its general fund.
"It is time for Kansans to hear the truth from their elected officials, and to have their elected officials deliver realistic results for them," Kelly said.
Republican House Speaker Dan Hawkins dismissed the proposal as a distraction. "This is no more than a half-baked, last-second shot to save face after blocking real property tax relief," Hawkins said. "Instead of fixing the problem, it protects the very system that's causing it and gives the taxpayers crumbs. The only people who benefit are the taxing authorities that keep demanding more while families fall further behind."
In a separate statement responding to the veto itself, Hawkins said Republicans had made property tax relief a top priority for two years while the governor blocked progress. "Kansans didn't send us to Topeka to play political games, they sent us here to deliver results," Hawkins said. "Kansas families are being crushed by rising property taxes. Across the state, they are being forced into tightening their budgets and making smarter, more fiscally responsible choices. Local government should be doing the same."
Hawkins signaled the fight was not over. "Kansans needed action. What they got was a political play in the 11th hour," he said.
The Legislature returns to Topeka Thursday and Friday for its annual veto session, where lawmakers take final action on unresolved and vetoed bills. An override would require a two-thirds majority in both chambers. Neither vote on HB 2745 cleared that bar — the Senate passed the substitute 22-18, short of the 27 needed, and the House concurred 63-59, well below the 84 required — making an override on the property tax bill unlikely.
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