TOPEKA, Kan. (AP) — Some Republicans on Tuesday downsized their ambitions for cutting Kansas income taxes and advanced a narrower proposal in the GOP-controlled Legislature in hopes of overcoming Democratic Gov. Laura Kelly’s resistance to reducing revenues.
The House voted 81-43 to approve a bill that would save taxpayers $284 million over three years. Top GOP legislators started with a goal of providing relief to businesses and individuals whose state income taxes have risen because of changes in federal income tax laws at the end of 2017. The measure also includes a modest increase in the standard deduction for all individual filers.
The Senate last month approved a package of cuts that would cost the state $1.3 billion over three years and go far beyond Republican leaders’ stated goal of returning the unanticipated state revenue “windfall” tied to federal tax changes. The Senate’s measure revived memories of a notorious tax-cutting experiment in 2012 and 2013 under GOP Gov. Sam Brownback, which was followed by large and persistent budget shortfalls until lawmakers reversed most of it in 2017.
The House’s vote sent its plan to the Senate, which can approve it or launch negotiations with the House to draft another proposal. Senate tax committee Chair Caryn Tyson, a Parker Republican, said she wants to approve the House’s narrower plan and send it to Kelly.
Tyson said parts of the broader Senate plan might make GOP senators “feel good,” but, “It’s another thing to get it into law. We need it into law.”
Kelly vetoed two GOP tax-cutting plans in 2019 after winning the governor’s office the year before largely by running against Brownback’s legacy. She said earlier this month than Kansas is still “digging out” from the experiment and shouldn’t cut taxes because it is recovering from the coronavirus pandemic.
Some Republicans had hoped to pass a plan with the two-thirds majorities necessary in both chambers to override a Kelly veto. But supporters fell three votes shy in Tuesday’s vote in the House and were short of a supermajority in the Senate last month.
The governor has been open to increasing the standard income tax deduction but has proposed offsetting the cost of that policy by imposing the state’s 6.5% sales tax on online music and movies and digital streaming services. That idea is a non-starter for Republicans, who derided it as the “Netflix tax.”
The federal tax changes in 2017 were championed by former President Donald Trump and discouraged people from claiming itemized deductions on their federal returns. Kansas law does not allow people to itemize on their state returns if they don’t on their federal returns, resulting in larger state tax bills for some. Both the House and Senate plans would allow people to itemize on their state returns even if they don’t on their federal returns.
Democrats have attacked GOP tax proposals for providing relief to large corporations. House Minority Leader Tom Sawyer, a Wichita Democrat, decried the narrower plan approved Tuesday as a corporate giveaway.
It also wasn’t clear how much support Tyson would have among GOP conservatives who control the Senate to approve the House plan. The Senate bill was far more aggressive on increasing standard income tax deductions and would include provisions to exempt Social Security and other retirement income from taxes.