Kansas’ tax reform agenda goes far beyond food sales tax and one-time cash rebate

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TOPEKA – Governor Laura Kelly’s top tax reform priority is the elimination of the 6.5% sales tax on groceries and she has supported plans for a one-time tax refund over ‘one million residents of the state.

“My administration has taken steps to restore the Kansas economy and this fiscal responsibility has paved the way for direct tax relief,” Kelly said. “This relief will come specifically from proposals such as eliminating the food tax and offering a one-time $ 250 tax refund for Kansas families.”

Huge cash reserves in the public treasury have opened the door to support for cutting the state’s extraordinarily high sales tax on food, but it’s unclear whether the legislature is keen to give up 450 million dollars a year to end this source of income. The governor’s $ 445 million rebate program could prove politically difficult given the wave of ideas to cut property, income and sales taxes floating around the Capitol.

Senate Speaker Ty Masterson, of Andover, and Speaker of the House Ron Ryckman, of Olathe, have both said they will push for tax relief in the 2022 legislative session. However, both viewed Kelly’s discount as a campaign gimmick.

“While I’m open to any ideas to help reduce the tax burden on Kansas families, permanent solutions will be our priority,” Masterson said.

The 90-day legislative session meets on Monday, and election year politics have put the spotlight on current tax issues.

The Legislature’s Joint House and Senate Tax Committee recommended that appropriations and exemptions no longer in vogue be removed from legislation. A bill just created one personal income tax bracket, rather than three, in Kansas. There will be an effort to overhaul the energy taxation policy, perhaps to the detriment of the defenders of renewable energies.

In the House and Senate, lawmakers have introduced companion bills to grant a sales tax exemption to ranchers or farmers purchasing equipment to rebuild fences destroyed by wildfires. A dozen members of the House sponsored a bill that would provide tax relief for members of the military. Another would require court-ordered foreclosure auctions to be in-person events in the same county where the property is located.

A bill giving seniors substantial tax relief on property has generated a bipartisan buzz. There is an interest in repealing the $ 1.5 million property tax which funnels money to state universities for building maintenance. Kansas has higher gasoline and cigarette taxes than Missouri and Colorado, but there is a bill to amend the state wine tax.

The Senate leads the charge of a constitutional amendment designed to restrict government growth. This could be done by capping income or spending. In an emergency, the cover could be suspended by a two-thirds vote of the House and Senate and with the consent of the governor.

Another suggestion was to bring the bulging bureaucracy to the regime: tie state government employment to the people of Kansas.

Senator Caryn Tyson, Republican of Parker and chair of the Senate Tax Committee, said the legislative branch was ready to bring a constitutional amendment for debate in the 2022 session. She rejected the skepticism of Wichita representative Henry Helgerson, who said the constitutional amendment was accompanied by too many complications.

“We need innovation. We need new ideas, ”said Tyson, who is pushing for the GOP’s appointment as state treasurer. “I think it’s the year.”

Tyson said the state’s heavy reliance on property taxes to run government should end. People on limited incomes make choices to buy food, buy medicine or pay property taxes, she said.

“We have come to depend so much on property taxes that we are stagnant,” Tyson said. “In fact, people and businesses are leaving the state as a result.”

The legislature is expected to debate a bill exempting social security benefits from state income tax. It would cost the state $ 230 million to $ 300 million per year to exempt all retirement income from state tax. A political question raised by Republicans and Democrats was whether it was fair to give this special interest tax break to wealthy retirees.

“I don’t worry about people making hundreds of thousands of dollars because they also buy Beamers and Mercedes,” said Rep. Les Masons, a Republican from McPherson.

Senator Mark Steffen, R-Hutchinson, said the state attorney general should challenge the constitutionality of state law by gradually increasing state aid to public school districts K-12, which are supported by a $ 20 million statewide property tax. The inflation triggers in the existing law will unsustainably increase the financial strain on the state budget, he said.

It is not clear how many tax reforms the state could afford and how eager lawmakers and the governor would be to find a compromise on tax policy. Overall during the 2021 legislature, only 116 bills became law out of 769 tabled. Kelly vetoed 10, but five were canceled.


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