Kelly vetoes major property tax bill, blasts GOP leadership in escalating tax fight

TOPEKA, Kan. — Gov. Laura Kelly on Monday vetoed three Republican-backed tax bills, headlined by property tax measure House Bill 2043, drawing a sharp rebuke from House Speaker Dan Hawkins. In her veto message, Kelly accused GOP leaders of blocking her compromise and ramming through an "untenable" and "sure-to-fail" bill.

HB 2043 did not cut any property tax rate. Instead, it created a citizen veto: if a city, county or other local entity proposed a budget with property tax revenue growing faster than the lesser of Midwest CPI or 3%, residents could block the increase by gathering petition signatures from 10% of voters who participated in the most recent secretary of state election. Once validated, the over-cap budget would be defeated automatically — without the public hearing required under current revenue-neutral law. The bill exempted growth tied to retiring tax abatements, new construction, bond payments and all K-12 school districts.

The vehicle GOP leadership used was almost as notable as the policy. HB 2043 began life in 2025 as an unrelated insurance bill, clearing the House 97-14 and the Senate 39-0 before sitting in conference for more than a year. After Kelly vetoed the original GOP property tax bill (HB 2745) earlier in April and a separate effort to attach a 3% assessment cap to a constitutional amendment collapsed in the House 59-62, leadership swapped out conferees, gutted the insurance language and inserted the property tax framework. The rewritten bill cleared the House 87-35 and Senate 27-13 on April 10; the Legislature adjourned sine die hours later, making override impossible without a special session.

Kelly's alternative — which she said was denied a discussion or vote — combined a one-time $250 vehicle tax reduction, a permanent increase of the state school mill levy residential exemption from $75,000 to $150,000, and a $60 million fund to help counties offset property tax increases. She tied the underlying local-tax burden to the 2012 income tax cuts championed by former Republican Gov. Sam Brownback, arguing those cuts depleted state coffers and pushed costs onto cities and counties. She called for a return to a "three-legged stool" balancing sales, income and property taxes.

Hawkins, in a statement headlined "Governor Rejects Taxpayer Voice, Vetoes Property Tax Relief," called HB 2043 "a straightforward reform that empowered taxpayers by allowing them to push back when property tax collections grow faster than families can afford."

"This veto makes one thing clear: there was never any intention for this Governor to come to table on property tax relief," Hawkins said, charging that Kelly acted prematurely — "a decision didn't have to come until later this week" — to "crush hopes of real relief for Kansans." He accused Democrats of shielding "local government spending sprees from true accountability" and vowed House Republicans "will not stop fighting."

Kelly also vetoed House Bill 2515, which would have established the Kansas Legal Tender Act recognizing gold and silver specie as legal tender and creating an income tax subtraction for sales of specie. Kelly said it diminished state resources to benefit a "select subsection" of citizens at the expense of schools, roads and foster care.

She also struck down House Bill 2044, which would have created an income tax subtraction for armed forces compensation and shielded homeowners from losing the homestead property tax refund or Selective Assistance for Effective Senior Relief credit if their home's appraised value later rose above $350,000. Kelly said it bypassed standard procedures and failed to account for long-term budget obligations.

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