A Kansas Senate committee started work Monday on a bill that would repeal a key piece of the 2012 tax cuts, an income tax exemption for more than 300,000 business owners. It would also raise income tax rates.
The committee is planning to start debate on the proposal Tuesday.
Drew Quinn, a real estate broker from Overland Park, blasted the plan during a hearing. He told the Senate tax committee that changing course on tax policies would drive away business.
“You are screaming to the outside public, 'you cannot trust the state of Kansas, you cannot make business plans, you don’t want to come here because we’re unreliable,'” said Quinn.
Quinn said the state needs to cut spending, not raise taxes. Some business industry groups, including the Kansas Chamber of Commerce, also called for defeating the plan.
Others argued tax changes could help put the state on a better financial footing. The Kansas Association of School Boards and Kansas Economic Progress Council said the plan is a starting point for important tax discussions.
At the hearing, Republican Senator Dan Goddard said he was greeted Monday morning by a message from one of his constituents asking him to raise their taxes. He said that's a message he's heard repeatedly.
"I think that people have a very strong feeling that we're in serious financial trouble, and that it's going to take the effort of everyone to get us even with the board or above board again," said Goddard.
Goddard said the troubles have led to taking money from transportation and a proposal to extend the time before the state pays off a shortfall in its pension plan, KPERS.
“I think we’re all concerned about how are we going to go about establishing a fair tax policy that will take care of those things that we’re, quite frankly, neglecting today,” said Goddard.
The tax bill alone would not be enough to eliminate a shortfall in the state budget next fiscal year, which amounts to more than $500 million. The tax plan would bring in about $288 million next fiscal year, according to a state analysis.
Governor Sam Brownback also took a preemptive strike at the proposal, saying it would hurt the economy, working Kansans and low-income Kansans.
"It punishes the middle class—teachers, police officers, and nurses—working hard to provide for their families and serve their communities. It punishes job-creators, the backbone of our Kansas economy," said Brownback.
Brownback pushed for the tax cuts and has staunchly defended them.
Stephen Koranda has more: