A compromise tax bill was finally agreed upon by Kansas lawmakers after months of back and forth between the parties and chambers.
It’s the third attempt at comprehensive tax reform by the Legislature, following a failed attempt to override the governor’s veto during the early session and a package that was comfortably approved by the House but killed in the Senate.
Republicans viewed the flat tax, commonly known as a single-rate income tax, as a primary objective, while Democratic governor Laura Kelly saw it as a red line.
Previous ideas narrowly missed avoiding the governor but came dangerously close to obtaining a veto-proof majority.
Similar to the House bill that was approved last month, the most recent bill does away with the single-rate tax but is supported by the governor.
“Conference Committee Report for House Bill 2036 does not represent the perfect tax plan. However, it provides substantial tax relief for all Kansans,” Kelly stated. “It does all this while maintaining the current income tax structure and keeping Kansas on a fiscally sustainable path forward. I intend to sign this bipartisan compromise when it reaches my desk.”
The following are included in the tax plan:
- The decrease in the top tax bracket rate from 5.7% to 5.5%.
- The standard deduction is raised to $5,000 for individuals filing alone, $7,500 for heads of households, and $10,000 for couples filing jointly.
- Food sales tax is eliminated on July 1st, as opposed to January 1st.
- Removes income taxes associated with Social Security benefits.
- First $100,000 in property is exempt from state property taxes.
- Cut the 20 mill statewide school finance levy to 19.5 mills.
- Cut back on the fee for banking privileges.
It’s not ideal for members of either party who have to give in on some of their principles in order to get a tax cut signed into law, even though a plan might eventually pass.
During the conference committee deliberations, wherein members of the House and Senate deliberate jointly to produce unamendable legislation, Rep. Tom Sawyer, a Democrat from Kansas, expressed his doubt that he would support the bill.
The senator from Parker, Caryn Tyson, said, “You might not be alone.”
