Legislature sends governor tax bill with $50 million for small businesses hurt by COVID-19

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TOPEKA — The Legislature by a nearly unanimous margin voted Monday to send tax-reform legislation to Gov. Laura Kelly but not before a Senate Republican supporting the bill insisted the governor receive no credit for earmarking $50 million to reimburse small businesses that suffered in early stages of the COVID-19 pandemic.

Senate Democrats leapt to the governor’s defense as the Senate voted 35-0 and the House moved 120-1 to complete their work on House Bill 2136 on the annual session’s final day.

A key provision in the bill earmarked federal relief dollars for property tax refunds to businesses forced to reduce occupancy or temporarily close in 2020 when coronavirus erupted. Without a vaccine to counter the virus, which has now contributed to the death of more than 1 million Americans, the Kelly administration and county officials issued emergency orders forbidding mass gatherings at stores not viewed as essential.

For-profit businesses with documented losses in 2020 and 2021 related to pandemic mandates would be eligible for up to $5,000 in property tax refunds. Nonprofits and online companies would be ineligible as would companies that accepted more than $150,000 in federal, state and local government aid during the pandemic.

Weskan Rep. Adam Smith, chairman of the House Taxation Committee, said the retail storefront property tax relief bill delivered important amounts of compensation to businesses undercut by the government’s effort to stall COVID-19. Businesses that permanently closed could be eligible for assistance under the state initiative.

“We wanted to tailor this mostly to smaller businesses,” he said. “Not necessarily your large retail chain stores that predominantly did not have to shut down.”

Sen. Tom Holland, D-Baldwin City, said he was proud to work with GOP Sen. Mark Steffen of Hutchinson on the original outline of the tax policy. Their motivation, Holland said, was to target aid to rural and urban businesses unable to compete with larger companies for federal Paycheck Protection Program funds and other opportunities to secure government subsidies during the pandemic.

“We had a concern back two years ago that there were certain small businesses, sole proprietorships or whatever, that didn’t have access to the PPP money and other things that other better-connected businesses did,” Holland said.

Sen. Caryn Tyson, a Republican from Parker and a candidate for the GOP nomination for state treasurer, said during remarks about merits of the bill that Kelly would try to claim credit for delivering property tax relief to Kansas businesses. It is a safe assumption Kelly would sign the bill, given the extraordinary bipartisan support.

In her speech, Tyson predicted three times the Democratic governor would try to grab the spotlight on tax relief. Kelly, a former state senator, is seeking a second term as governor in 2022.

“She’s going to take credit for giving property tax relief,” Tyson said. “Guys, don’t buy into that narrative. It is a false narrative.”

Tyson then turned to her complaints about the Kelly administration’s awarding of a contract to overhaul the computer system used by the Kansas Department of Labor’s to process unemployment claims. The labor department’s antiquated computer system, which nominally did the job during periods of low unemployment, was overwhelmed during the pandemic when more than 12% of Kansans lost jobs. The delivery of unemployment benefits was delayed for thousands of people.

Senate Minority Leader Dinah Sykes, D-Lenexa, said the campaign-season monologue delivered by Tyson on the Senate floor was an example of what was wrong with politics.

“We must do better and it begins with not caring if you get the credit for something. The future of Kansas should be the driver — not credit,” Sykes said.

Sen. David Haley, a Democrat from Kansas City, Kansas, said Kelly and many other U.S. governors responded to the pandemic by adopting masking, social distancing, testing and other measures to soften the blow of the virus until a vaccine could be produced and distributed. Limiting public gatherings, even at stores, was an important public health policy, he said.

“It was the responsible thing to do. It was hard to see these businesses closed. But, now, it is the responsible thing to do to support this legislation to offset as much as we can losses sustained by our small businesses,” Haley said.

Kansas Reflector is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Kansas Reflector maintains editorial independence. Contact Editor Sherman Smith for questions: info@kansasreflector.com. Follow Kansas Reflector on Facebook and Twitter.

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