Kansas Chamber To Torpedo State Board of Tax Appeal Nominee

By Tim Carpenter, Kansas Reflector

February 23, 2021

TOPEKA — The behind-the-scenes campaign led by the Kansas Chamber to defeat Gov. Laura Kelly’s nominee for the state Board of Tax Appeals boiled over Tuesday as members of a Senate committee waded into the high-stakes legal fight over appraising Walmart, Home Depot and other big-box outlets for property tax purposes as if those retail buildings were vacant.

Kelly recommended Robert Marx, a Fairway appraiser with 45 years of experience in the field, in April 2020 to serve on the Kansas board that resolves disputes between taxpayers and taxing authorities. The COVID-19 pandemic prevented the Kansas Senate from voting on the appointment of Marx, who the governor said would act “impartially and thoughtfully to ensure tax fairness for all Kansans.”

His nomination ran into trouble when the Kansas Chamber launched an effort to convince the GOP-led Senate that Marx’s professional work created conflicts of interest in pending tax appeals and court cases. In particular, the Kansas Chamber argued his view on appraisal of big-box buildings rendered him unacceptable to the business lobbying organization.

Some of the Kansas Chamber’s members are involved in legal battles designed to compel cities and counties to value occupied large commercial properties as if “dark” and available to a future hypothetical user. One concern about the dark-store interpretation applicable to giant retailers would be that a greater portion of the property tax burden could be shifted to smaller businesses on Main Street.

In confirmation testimony before the Senate Assessment and Taxation Committee at the Capitol, Marx said he had earned the respect of peers in the appraisal business on a state and national level.

“This appointment would demand a broad spectrum of experience,” he said. “Experience, training, judgment to give the taxpayers a fair shake. The current economic crisis has made valuation even more difficult. I’ve had plenty of time to think this over. I think it’s time for me to step up and serve in public service.”

Eric Stafford, a statehouse lobbyist with the Kansas Chamber, distributed a letter in 2020 and more recently forwarded materials to senators in opposition to the nomination of Marx. He argued members of the Board of Tax Appeals ought to avoid the appearance of impropriety and that Marx had “both a client conflict and an issue conflict” if placed on the tax appeal board. He said Marx’s employment at appraisal firm Bliss Associates included work for Johnson and Wyandotte counties as an outside expert.

“That relationship results in a client conflict of interest. As those two counties make up 60% of all cases pending at BOTA, he would be precluded from participating in over half of all matters before the board,” Stafford’s letter to lawmakers said. “Mr. Marx was retained by Johnson County to appraise five locations in the Walmart property tax case.”

Stafford said Marx had an issue-driven conflict of interest because he represented himself as an “advocate” for rejection of the dark-store theory of appraising bit-box retailers.

In rebuttal, Marx said he had not advocated the cause or interest of any client or on any valuation matter as alleged by the Kansas Chamber.

“I’ve appraised many big-box retail stores for both county appraisers and store owners,” Marx said. “It’s the same issue no matter who I work for. I’m an independent. I trust that I’m not disqualified because I’m overqualified. I will follow the law if I’m appointed to this board. I’ll be a workhorse.”

Sen. Caryn Tyson, the Parker Republican who chairs the Senate tax committee, said she was apprehensive Marx would be a voice against the dark-store appraisal theory if confirmed to the Board of Tax Appeals. She anticipated he would operate like some judges in the state who strive to create law rather than interpret statute.

“We have people legislating from the bench in Kansas,” Tyson said. “My concern is that you may take that upon yourself to legislate from the bench and not follow the letter of the law.”

Marx said Kansas law didn’t require appraisers in Kansas to assume large commercial properties were boarded up and empty.

“There’s nothing in the law that says for me to make that hypothetical assumption, but if the courts say to do so, I am absolutely prepared to take that approach,” he said.

Sen. Tom Holland, a Baldwin City Democrat and member of the Senate tax committee, posed questions during the confirmation hearing to both Marx and Stafford, who had distributed to Senate committee members materials in the past week intended to undermine the nomination. Holland asserted the Kansas Chamber, through its membership, had a conflict of interest on the nomination due to ongoing legal disputes on property tax issues.

“You actually have members who have open cases before the court,” Holland said.

“I think it doesn’t matter,” Stafford said. “I think we’re doing what we can do to represent our membership.”

“The point I’m trying to drive home here is that I think you’re conflicted yourself,” Holland said.
Tyson suspended the confirmation hearing of Marx to allow time for gathering of additional information on the nominee that could be of use to the Senate committee.