TOPEKA, Kan. (KCTV) – Kansas Governor Laura Kelly vetoed a property tax bill and threw her support behind a three-part relief plan partially introduced by Sen. Ethan Corson (D-Prairie Village).

What Happened

Gov. Kelly said she vetoed Senate Substitute for House Bill 2745 on Wednesday, April 8, rejecting a measure that would have allowed residents to petition against local government budget increases exceeding 3%.

Kelly said the bill fails to deliver real property tax relief and instead strips locally elected officials of the flexibility they need to manage their communities.

“Instead, the truth is that this bill will only restrict the ability of locally elected officials to be nimble enough to adjust to the unique needs of the communities they serve,” she added.

The Bill’s Impact – Before the Veto

Kelly said the damage from the bill’s passage had already begun – even before she signed the veto.

According to the Governor, multiple school districts and local governments were notified that bond deals set to close within days had been terminated by underwriters, citing financial uncertainty created by the legislation.

“This means that projects which have already been approved at the local level have been stopped dead in their tracks, as their funding source has been removed due to the passage of this bill,” she said.

What the Bill Would Have Done

Senate Substitute for HB 2745 set a 3% cap on property tax revenue growth for local governments.

Any budget exceeding that threshold – adjusted for inflation – would trigger a public protest petition process.

If at least 5% of registered voters in a taxing subdivision signed a petition by Sept. 15, the budget increase would be blocked, forcing the governing body to revert to the prior year’s levy.

The bill passed the House 76-45 on Feb. 26 and cleared the Senate 22-18 on March 27 under emergency final action.

Three-Part Relief Proposal

Rather than simply vetoing the bill, Kelly urged the Legislature to take up a three-part property tax relief package introduced by Corson before the 2026 session ends.

1) Immediate Vehicle Tax Credit – SB 378

Senate Bill 378, introduced by Corson in January, would provide a one-time, nonrefundable $250 vehicle tax credit applied at the time of registration for eligible vehicles.

That would include cars, trucks, motorcycles, buses, trailers and RVs.

The credit would be funded through the state’s budget stabilization fund and would take effect in FY 2027.

However, the credit is nonrefundable. If a vehicle owner’s tax liability is less than $250, they will not receive the difference as a refund.

The Senate Committee on Taxation held hearings on Feb. 4 and Feb. 5. No opponents testified against the bill.

However, SB 378 has stalled in the Senate with no movement since the second hearing – making Kelly’s public push a potential lifeline for the legislation.

2) Incentive Fund for Fiscally Responsible Local Governments

Kelly said the plan proposes a new state fund to reward cities and counties that keep annual budget growth at or below 3%.

According to the Governor, the state would deposit $60 million into the fund in the first year, growing by 2% annually.

She noted that distribution would be based on population and total assessed value, giving both rural and urban communities equitable access.

3) Doubling the 20-Mill School Finance Exemption

Lastly, under current Kansas law, the first $75,000 of a home’s appraised value is exempt from the 20-mill levy used to fund public education.

The proposal would double that exemption to $150,000, providing annual relief to more than 700,000 Kansas homeowners, Kelly said.

A demand transfer from the State General Fund would ensure public schools continue to receive full constitutional funding, she added.

“I’m laying out a fiscally responsible property tax relief plan that I invite the Legislature to debate and take action on to finally give Kansans some real relief,” Kelly stated.

Republican Response

Republican leaders pushed back sharply, framing the veto as a political move that leaves Kansas families behind.

“Laura Kelly and the Democrats have proven they are not serious about solving the property-tax crisis that is driving Kansans out of their homes,” said Senate President Ty Masterson (R-Andover). “Enough is enough. When I’m Governor, the runaway appraisals and out-of-control local spending will come to an end.”

House Speaker Dan Hawkins (R-Wichita) said the fight is not over.

“Kansans didn’t send us to Topeka to play political games; they sent us here to deliver results. Kansas families are being crushed by rising property taxes,” Hawkins added. “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. This conversation is not over and we will continue to fight to put Kansans who are suffering under out-of-control property taxes back in the driver’s seat.”

Majority Leader Chris Croft (R-Overland Park) called the veto a betrayal of Kansas voters.

“The people of Kansas deserve a voice in how their hard-earned dollars are taxed, and this veto ignores their needs and the will of the people,” Croft said.

Local Government Reaction

Local governments and organizations were split on HB 2745, but seemed to mostly oppose the legislation.

Opposed – City of Overland Park

Overland Park City Representative Mike Koss testified against the bill, warning it would threaten the city’s financial stability and its ability to fund public safety.

He noted that $98 million of Overland Park’s budget is dedicated to public safety – more than 90% of which is personnel costs.

Koss argued the 5% protest petition threshold was too low, saying it would allow a small majority to override the will of the majority.

He asked the Legislature to restore the threshold to 10% and reinstate a $60 millin property tax relief fund that was stripped from the bill during House floor debate.

In Favor – Kansas Farm Bureau

Jon Donley, representing the Kansas Farm Bureau and it smore than 30,000 farm and ranch families, testified in support of the bill.

He said the measure would slow the growth of local government spending and reduce long-term pressure on property taxes for all classes of property.

“KFB feels that HB 2745 provides the proper policy directives to encourage local taxing jurisdictions to be fiscally responsible,” Donley added.

What’s Next

The Legislature has until the end of the session to consider an override of Kelly’s veto or to take up the new plan – including stalled SB 378.

Republicans hold a supermajority in both chambers, giving them the votes needed to override without Democratic support.

However, the number of supporters in the initial votes would not be enough to override the veto.

Kelly is urging lawmakers to act before the session closes.

“It is time for Kansans to hear the truth from their elected officials and to have their elected officials deliver realistic results for them,” she concluded.