Efforts to eliminate the 6.5% sales tax on food have the support of the leading candidates for governor, but the change has hit some political hurdles nonetheless.
Buying groceries has become more difficult for Patty Wiggins.
Previously, a week’s worth of groceries cost the retired nurse about $30. But as inflation over the last year made seemingly everything more expensive, the groceries cost about $50.
To help fill that gap, Wiggins, who lives in Lawrence, supplements her groceries through her local food bank, Just Food. Wiggins said she wished she wouldn’t need to do that, and there is some hope that some relief is on the way.
Kansas lawmakers are debating a bill that would eliminate state sales tax on food. If the bill becomes law, it would wipe out the state’s 6.5% sales tax on food and provide a little more spending room for shoppers like Wiggins.
“(Spending) $10 or $20 more a month may not sound like a lot,” Wiggins said. “But it makes a difference, especially when you live like me on a fixed income.”
Despite apparent bipartisan support for dumping the sales tax on food — it’s a top priority of Democratic Gov. Laura Kelly and the change has support from Attorney General Derek Schmidt, her likely re-election opponent in November — the effort looks shaky at best.
Already, one state Senate committee has amended the proposal to delay the end of the tax by a year, to Jan. 1, 2024.
The Republican-controlled Legislature has also tried to tie the measure to other, more partisan tax changes. And GOP lawmakers could be reluctant to give Kelly a win on cutting taxes in an election year.
Can the state afford it?
Republican state Sen. Caryn Tyson from southeast Kansas chairs the tax committee and said the elimination of the sales tax on food has been complicated by another major tax bill. The governor lobbied hard for a change in law that will let the state give roughly $1 billion in potential tax incentives to a company — its identity hasn’t been made public — if it delivers on promises for a manufacturing plant with thousands of jobs.
Tyson said if the company chooses to move to Kansas, the state would be providing millions of dollars in incentives to the company for years. Erasing the sales tax on food could cost the state from $320 million to $785 million a year in revenue. Tyson said the tax giveaways to a new, large employer would make it harder to afford the lost money to the state that would come with exempting food from the sales tax.
“We have to be good stewards of the state’s money,” Tyson said. “That has to be taken into consideration when working on other kinds of legislation.”
Along with pushing back the start date of the food sales tax cut, the amended bill also includes making changes to the state’s sales tax on utilities.
Sen. Tom Holland, the top-ranking Democrat on the tax committee, wants the food sales tax to go away in July — not a year and a half later.
Holland also said Kansas can afford to offer the incentives to a manufacturer and cut the sales tax because the state expects to have more than $2 billion in surplus at the end of the fiscal year in June.
“We need to get that tax relief back to Kansas families,” he said. “The best way we can do that is a sales tax refund bill.”
Inflation pressure
Advocates for the cut have said it is needed now to give Kansans a break when food prices are skyrocketing.
The U.S. Department of Labor says the country saw a 7.5% increase in rate of inflation over the last year, which is the largest increase since 1982.
Wiggins, the retired nurse, said she saw a small increase to her Social Security checks. But she said that didn’t make much of a difference.
“It’s all gone because of the inflation,” Wiggins said. “They say inflation has hit certain portions of the groceries. But what I see in the stores, it has hit everything.”
She is not alone. Brian Walker, president for the Kansas Food Bank based in Wichita, said many of the more than 200,000 Kansans his organization serves would benefit from food sales tax relief. Removing the tax would immediately allow them to put more food on their tables, he said.
People with lower incomes are disproportionately affected by the tax, Walker said. He used the example of a four-person family making $20,000 a year purchasing the same amount of food as a four-person family making $100,000 a year. While the families buy the same amount of food and pay the same amount of tax on it, the family with a smaller household income pays a larger percentage of that income toward the tax.
“To us, it makes really good sense,” Walker said. “When you cut the sales tax, you aren’t favoring anybody — both groups of folks get the relief. But the help it extends to a struggling family is huge.”
Election politics
Debates about giving breaks to consumers and whether the state can afford the lost revenue — Republicans note that the state’s financial surplus is propped up by federal pandemic aid that won’t continue in years to come — come in the midst of an election year.
Kelly, who is running for a second term, has repeatedly called for the cut of the tax. It featured prominently in her State of the State address in January and her “Axe the Food Tax” slogan plays in her re-election campaign. Kelly says it would save the average Kansas family about $500 a year.
But Schmidt also asked lawmakers to make a cut this year.
In a letter to Republican legislative leaders in November, Schmidt called for the lawmakers to eliminate or at least significantly reduce the tax on groceries because of inflation.
Wiggins said she hopes lawmakers don’t delay on approving legislation.
“It would be nice to think they would pass it and get started changing (the tax),” she said. “I’ll believe it when I see it.”
Dylan Lysen reports on politics for the Kansas News Service. You can follow him on Twitter @DylanLysen or email him at dlysen (at) kcur (dot) org.
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