House, Senate restrain members to avoid amending deal anchored to income tax cuts
TOPEKA — The Kansas Legislature deflected bipartisan interest in tweaking Tuesday a bill negotiated by Gov. Laura Kelly and top Republican House and Senate leaders delivering a projected $2 billion reduction in state income and property taxes during the next five years.
In a special session of the Legislature, the Senate voted 34-4 and the House 121-2 to forward the unaltered package to the Democratic governor. The Legislature took action on the tax measure before diving into legislation shaping economic development incentives intended to draw the Kansas City Chiefs or Kansas City Royals to new stadiums in Kansas.
A majority in the Senate voted to cut off debate on the tax bill and avoid consideration of amendments Republican and Democratic senators were preparing to offer. Focus of dissent in terms of the tax bill negotiated by Senate President Ty Masterson, House Speaker Dan Hawkins and Kelly centered on removal from the package of $55 million in reductions to property taxes and repeal on July 1 of the state’s 2% sales tax on groceries. The bill also included a provision expanding by $6 million the state’s childcare tax credit, which drew criticism.
“I’m champing on the bit. I’m ready to vote for this thing,” said Sen. Jeff Pittman, D-Leavenworth. “Coming to this point, we’re all a little frustrated. We didn’t all get exactly what we wanted. We are delivering tax cuts to all Kansans.”
Sen. Rob Olson, an Olathe Republican not seeking reelection in 2024, made the motion to halt the Senate debate and call a vote. Olson, who endorsed a Kelly tax plan early in the session and voted for the compromise tax bill, said the negotiated package wasn’t ideal, but work of legislators often required some form of compromise.
“We can sit here and pick it apart,” he said. “I think we’re going in the right direction.”
In the House, Rep. Vic Miller, D-Topeka, offered an amendment to Senate Bill 1 that would have added a 75% property tax rebate to unemployable, disabled veterans. That tax break had been considered during the regular legislative session, but became snarled with a bundle of special-interest tax breaks. One of those would have benefitted owners of restaurants, childcare facilities and fitness clubs, including owners of the Genesis Health Club chain.
Rep. Adam Smith, the Weskan Republican and chair of the House Taxation Committee, asked peers in the House to vote down Miller’s amendment. He said it was important to follow the Senate’s lead and preserve all elements of the tax bill negotiated by Kelly, Hawkins and Masterson.
“This is one of those tough ones,” Smith said. “This is the struggle we’ve had really for two years trying to find not only the right dollar amount, but the proper policy pieces to go into this bill. I do worry that any changes to the original agreement by the legislative leaders and the governor’s office — we don’t have a choice to come back and override this if there is a veto.”
Prior to convening of the special session, Kelly said she would sign the tax bill if adopted by the Legislature. She previously vetoed three major tax bills because they weren’t financially sustainable for state government.
Globalists and wokeism
While a handful of senators voted against undermining debate on the tax proposal and then voted for passage of the bill, outgoing Sen. Alicia Straub left no doubt she was disturbed by behind-the-scenes wrangling between GOP legislative leadership and the governor ahead of the special session. She appeared frustrated by explosion of interest in trying to convince owners of the Chiefs or Royals to relocate those professional teams to Kansas.
“This special session and tax bill may go down in history as the deflategate of special sessions,” the Ellinwood Republican said. “I refuse to play ball with billionaire globalists, cheaters, liars and thieves. Kansas deserves better.”
Sen. Marci Francisco, D-Lawrence, inquired as to why repeal of the state food sales tax law was taken off the table. And, outgoing Sen. Tom Holland, D-Baldwin City, expressed dismay the negotiators stripped from the deal much of the residential property tax reductions contained in previous legislation.
The tax legislation was presented Monday to a joint session of the House and Senate tax committees. The regular process of assigning a bill to those committees for hearings, debate and amendment was bypassed. Senate leadership decided the bill would be brought directly to the floor for consideration. After a handful of speeches outlining objections to the bill, and before any amendment could be offered, a motion was approved to proceed to final action.
Another senator who chose not to seek reelection, Hutchinson Republican Mark Steffen, said he was astounded negotiations led to a doubling of the state tax credit on childcare expenditures. He said the tax policy incentivized parents to enter the workforce, place children in daycare and weaken “traditional” family structures in Kansas.
Masterson pushed back against Steffen’s assertion bolstering a childcare tax provision in state law could undermine the nuclear family.
“That is so over the top. I find it incredibly offensive,” the Senate president said. “That’s akin to saying Trump somehow is going to destroy democracy.
Sen. Pat Pettey, D-Kansas City, said it was bizarre of Steffen to assert that parents who made use of childcare services were “bad parents.” She said that common practice meant economic circumstances required parents to work on behalf of their families and ridiculed the senator’s attempt to demonize certain parents.
Meanwhile, Steffen took Republican colleagues in the Legislature to the woodshed while accusing them of raising by 20% state government spending during his four-year term in the Legislature.
“Think of that,” he said. “We’ve got problems with wokeism, with big business trying to control our government.”
The bill moving to the House would create a two-rate state income tax structure with the upper rate at 5.58% and the lower rate at 5.2%. Under existing law, the three-rate approach taxed Kansans at rates of 3.1%, 5.25% and 5.7% based on income.
The bill also would raise the personal income tax exemption from $2,250 to $9,160 and raise the standard deduction by 3%. It also would eliminate the state’s income tax on Social Security benefits, which would allow seniors to avoid more than $100 million annually in state income tax payments. Only a dozen states tax Social Security payments.
The child care tax credit in Kansas would be doubled to 50% of the comparable federal tax break. The residential property tax exemption in the bill tied to funding of Kansas public schools would be nearly doubled to $75,000 from the current level of $42,000.
Negotiations led to removal of broader property tax cuts and repeal of the state’s sales tax on food, which is scheduled to expire Jan. 1.
Overall, the bill endorsed by the Legislature would reduce state revenue by nearly $2 billion over five years. The annual adjustments would range from $380 million to $471 million. The high end would occur the first year of implementation because some provisions of tax reform would be retroactive.
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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