Kelly launches legislative campaign for three-year, $500 million state tax reduction plan

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Ends food sales tax in ’23, creates school tax holiday, hikes Social Security exemption

ROELAND PARK — Gov. Laura Kelly initiated a campaign Monday to convince the Republican-led Legislature the revenue surplus was sufficient to end the state sales tax on groceries by April 1, create a three-day sales tax holiday on school supplies and increase the state income tax exemption on Social Security benefits.

Individual pieces of the Democratic governor’s proposal, including the additional idea of dropping the state sales tax on diapers and feminine hygiene products, have been discussed by the Legislature. The only element to be embraced by House and Senate members has been elimination of the sales tax on groceries, but the bill signed by Kelly earlier this year would accomplish that goal over a three-year period.


“By cutting taxes on groceries and diapers, school supplies and Social Security, this plan will put money back in Kansans’ pockets and create real savings for those who need it most,” Kelly said. “I am calling on legislators of both parties to support these bills and provide practical financial relief to families and retirees across our great state.”

During a news conference in the fresh fruit and vegetable section of a Price Chopper store, the governor said the “Axing Your Taxes” program would save Kansans more than $500 million during the next three years. More than three-fourths of that total would be derived by dropping the state’s 6.5% sales tax on groceries by April 1 or July 1, she said.

Under existing law, the grocery sales tax imposed by the state would fall to 4% on Jan. 1, drop to 2% on Jan. 1, 2024, and be eliminated on Jan. 1, 2025. The governor had proposed the food tax be dropped in 2022, but the compromise was a three-step process.

Kelly said she was proud of that bipartisan bill, but remained convinced it “didn’t go far enough fast enough.”

“Kansans still need more relief,” Kelly said. “The cost of groceries is way too high, plain and simple. Historically, the grocery tax in Kansas has been one of the highest in the country, which is somewhat ironic considering we grow the food that feeds America and the world.”

Republicans in the House and Senate with responsibility for shaping tax legislation haven’t expressed enthusiasm for speeding up the food sales tax reduction process because they prefer to devote state resources to income and property tax reductions.

Kelly also urged the Legislature to get behind a three-day state sales tax holiday every August on school supplies, personal computers, instructional materials and art supplies. It would benefit families and educators while providing an incentive for people not to cross the border into Missouri to buy these items, she said.

The state income tax on Social Security income kicks in when a person earns more than $75,000 annually, but Kelly’s proposed bill would raise that exemption to $100,000. She said it was bad policy for Kansas to tax the entirety of a person’s Social Security income if that individual earned $75,001 or more. The estimated cost of the the adjustment would be approximately $50 million, she said.

In June, Republican gubernatorial candidate Derek Schmidt proposed elimination of state tax on benefits and income from Social Security, IRAs, annuities and other retirement vehicles to curtail population outmigration from Kansas. Schmidt’s proposal would have cost the state treasury an estimated $230 million annually.

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: Follow Kansas Reflector on Facebook and Twitter.

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