A showdown over tax reform is brewing in the Kansas Legislature after Democratic Gov. Laura Kelly unveiled a tax-cutting proposal on the first day of the 2024 legislative session.
Kelly’s plan released Monday includes eliminating the food sales tax by April instead of next year, getting rid of taxes on Social Security income and increasing the residential exemption on state property taxes from $42,000 to $100,000.
“That (property tax measure) provides another $100 million in tax relief for Kansas homeowners this year,” she said. “A significant number of Kansans will see all or almost all of their entire state property tax bill eliminated.”
That would impact the 20 mill levy applied by the state. The rest of a homeowner’s property taxes are levied by local governments.
While Kelly’s plan has support from a handful of Republican lawmakers – including Sens. John Doll and Rob Olson – GOP leaders are expected to again pursue a single-rate income tax system. The powerful advocacy group the Kansas Chamber has released a proposal that would create a single income tax rate of 5% for annual income over $15,000.
In a written statement, Republican Kansas House Speaker Dan Hawkins, from Wichita, said a simpler, single-rate tax system would keep the Kansas economy competitive with surrounding states.
“It seems we’re going to pick up right where we left off last session; I’m disappointed but not surprised to see the Governor playing politics with taxpayers’ money once again,” he said.
Proponents of a single-rate system say it would benefit all Kansas taxpayers and that the state can afford the lost tax revenue. Critics say it would disproportionately favor those with the highest income and would hurt state infrastructure and public schools.
Kelly vetoed such a plan last year and says she has the votes to prevent it from passing this year. She referenced former Gov. Sam Brownback and tax cuts during his term that led to budget shortfalls.
“We've been down that road before with the Brownback tax experiment and we all know how that turned out,” she said. “I refuse to take us back to the days of four-day school weeks, crumbling roads and bridges, and crippling debt.”
Other provisions in Kelly’s proposal include increasing the standard deduction on state income taxes, eliminating sales taxes on diapers and menstrual hygiene products and a back-to-school sales tax holiday.
Kelly’s full tax plan can be found here.
Daniel Caudill reports on the Kansas Statehouse and government for Kansas Public Radio and the Kansas News Service. You can email him at dcaudill@ku.edu.
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