During a debate in the House, Rep. Patrick Penn, a Wichita Republican and U.S. Army veteran, shared his personal experience serving in Afghanistan and Iraq. He emphasized the importance of keeping property tax relief for disabled veterans separate from policies that benefit corporations like Walmart and Genesis Health Clubs in avoiding property taxes.
U.S. Army combat veteran and state Rep. Patrick Penn passionately appealed to his colleagues in the Kansas House, urging them to oppose a bill that included two contentious measures. These measures aimed to reduce commercial property taxes but also posed a threat to property tax relief for veterans with disabilities. Rep. Penn implored his fellow lawmakers to consider the negative consequences of this bill and protect the rights and benefits of disabled veterans.
Republican legislator Penn from Wichita took action by proposing to send House Bill 2096 back to House and Senate negotiators in order to remove the undesirable aspects related to big businesses. He was not the only one who wanted to eliminate these elements, as the bill had otherwise been widely supported due to its benefits, such as providing property tax relief to elderly homeowners, individuals using various types of vehicles, and servicemembers who had returned from Afghanistan or Iraq with lasting physical or mental impairments.
Penn was not the only one who criticized negotiators for potentially jeopardizing property tax reform for disabled veterans in order to push forward the “dark-store theory”. This theory suggests that successful retailers like Walmart and Home Depot should be taxed as if their commercial buildings were empty.
A group of individuals, including him, opposed a specific provision in the bill called the “government competition” section. This provision was influenced by the owners of Genesis Health Clubs, based in Wichita. The owners, along with their lobbyist and legislative supporters, were advocating for a property tax exemption for their company. They argued that if they were to compete against recreational facilities funded by tax dollars from various public entities such as cities, counties, schools, and townships, they should be exempt from property taxes.
“I implore you to support this motion to send it back,” Penn passionately stated. “I stand here today feeling disillusioned, incredulous, and yes, angry. I firmly believe that it is unfair to grant certain health clubs an advantage or special treatment at the expense of disabled veterans and families in need.”
The tax rebuke
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During a marathon legislative debate on Friday night, the House listened to heartfelt pleas from individuals like Penn and others, urging them to support the motion proposed by U.S. Air Force veteran and Garden City Representative, Bill Clifford, who is a Republican. As a result of the affirmative decision, the bill was sent back to a House and Senate conference committee for additional deliberation and progress.
According to Clifford, this specific package showcased the kind of questionable legislative tactics that can take place during late-night sessions in the Capitol.
“As a veteran, I find it deeply offensive that we are being forced to vote against our fellow veterans,” he expressed his indignation. “While there are certainly positive aspects to consider, we should not be casting our votes in a way that enables negative consequences to occur.”
According to Rep. Pat Proctor, a retired U.S. Army colonel and Leavenworth Republican, property tax relief is the top priority for 20 organizations representing Kansas veterans. He highlighted that every year, around 3,500 veterans leave active duty at Fort Riley, Fort Leavenworth, and McConnell Air Force Base. Unfortunately, many of these veterans are choosing to relocate to states like Texas, Florida, Nevada, and Alaska, which offer property tax benefits for disabled veterans.
Rep. Adam Smith, the Weskan Republican and chair of the House Taxation Committee, emphasized the importance of showing respect and honor to all veterans.
According to Rep. Mari-Lynn Poskin, a Leawood Democrat, it is essential for fitness clubs and big-box retailers to prioritize the needs of disabled veterans in Kansas. They should not delay the passage of property tax benefits that are crucial for these veterans.
Across the rotunda
An attempt was made by Sen. Jeff Longbine, R-Emporia, to assign the bill to a conference committee in order to separate the quality pieces from the toxic ones. However, his strategy was unsuccessful as it was voted down 19-20. Following that, the Senate approved the bill with a vote of 23-14.
Senate President Ty Masterson, a Republican from Andover, played a crucial role in preventing the bill from being rejected outright. He specifically commended the property tax provision of the Genesis, which had been expanded to include fitness clubs, restaurants, and child care facilities. This strategic move aimed to downplay any perceived favoritism towards Genesis and gain support from a wider audience.
According to Masterson, it is important to acknowledge that the government should not be involved in competition. He proudly supports this provision and recognizes that some individuals may try to make it about specific people, but in reality, it is about promoting healthy competition.
Bundling popular bills with unpopular subject matter has become a common practice in the Kansas Legislature. When the Legislature returned from a three-week break in late April, there was an opportunity for House and Senate tax negotiators to meet and reconsider the components of HB 2096. There were several options on the table: narrowing down the legislation to address the concerns of dissenters, abandoning the package altogether, or reloading and giving the same deal another try.
“We must not use our veterans as bait,” stated Senator Jeff Pittman, a Democrat from Leavenworth. “I understand that this may sound like a strong statement.”
In 2023, Governor Laura Kelly, a Democrat, vetoed a bill that included the government competition aspect. However, Senator Caryn Tyson of Parker, a Republican, believes that the new package should still be pushed forward, regardless of Governor Kelly’s intentions.
According to Tyson, the chair of the Senate Assessment and Taxation Committee, our focus should be on serving our constituents without concerning ourselves with the governor’s potential veto. She believes that government entities should not be in competition with private businesses, as this goes against the purpose of government.
Those poison pills
Under the Veterans’ Valor Property Tax Relief Act, the state will establish a refundable income tax credit beginning in the 2024 tax year for veterans who are classified as totally disabled, permanently and totally disabled, or unemployable according to federal disability provisions. This tax relief will equate to 75% of the property taxes assessed and duly paid on residential property owned by the veteran.
The tax relief law for veterans differs from the one for the elderly in that it doesn’t impose any limitations based on annual income or home ownership value. This means that veterans who apply for the tax break are not bound by these caps. The projected costs of implementing this tax relief act are estimated to be $10.8 million in the next fiscal year, $11 million in 2026, and $11.2 million in 2027.
The proposed Genesis tax break aims to provide a statewide benefit to various businesses, including fitness facilities, child-care operations, and restaurants. This incentive would offer a tangible and personal state property tax exemption to businesses located in cities where a government-owned or operated facility is their competitor within a 5-mile radius.
To qualify for the tax break, businesses must meet certain criteria. Firstly, if there is already a government operation in place, the business would not be eligible. Moreover, the applying business must be up to date with their state and local tax payments. It is worth noting that in the past, Genesis has been late in paying their property taxes in various counties.
