The Kansas House and Senate agreed Wednesday on a comprehensive tax bill that retains the state’s existing three bracket structure while lowering income taxes for the state’s highest earners.
Kelly pledged to sign the bill, saying it “does not represent the perfect tax plan” but provides substantial relief.
“It does all this while maintaining the current income tax structure and keeping Kansas on a fiscally sustainable path forward. I intend to sign this bipartisan compromise when it reaches my desk,” she said.
The proposal, which would cost $1.4 billion over the next three years, reduces Kansas’ top income tax bracket, which starts at $30,000 annual income, from 5.7 percent to 5.5 percent. It also eliminates state income tax on social security, increases the standard deduction and child and dependent tax credit, accelerates the elimination of state sales tax on food and lowers state imposed property tax.
But the final product left Republicans and Democrats in the Legislature underwhelmed as many pointed to earlier proposals, including efforts at a flat and dual income income tax, as better options.
While the dual rate earned unanimous support in the House last week, the latest plan will lose support from both sides of the aisle and may struggle to earn the simple majority needed to get it to Kelly’s desk.
Rep. Adam Smith, a Weskan Republican who leads the House Taxation Committee, said he wasn’t yet sure how he’d vote on it.
“The attitude in the entire chamber is a little bit deflated,” Smith said.
And several Democrats expressed frustration over the changes to income tax that supported high income earners over low income earners.
“This has nothing for middle income or low income, so I cannot support it,” Rep. Tom Sawyer,a Wichita Democrat, said.
House Speaker Dan Hawkins, a Wichita Republican, agreed that the benefits to low income Kansans had been cut down in the compromise bill. He told his House Republican colleagues that he believed their earlier proposal was a better bill.
“I’ll always say the plan we came out with the two-rate plan was an excellent plan, probably the best plan we’ve seen all year,” Hawkins said. “But best plans don’t always pass, which is unfortunate.”
But Senate President Ty Masterson, an Andover Republican, saw the compromise as a win. After accepting a single-rate plan was not in the cards this year, Masterson had advocated for the three-rate plan rather than dual rate. Keeping three rates while reducing the top bracket, he argued, would move the state closer to the flat tax he had pushed for.
“I was looking for the shortest jump to a single rate and I feel we achieved it so I would call what we’re doing a victory,” he said. “I would rather go ahead and take a step to get the top rate where I’d like it to be and then we’ll fight those battles against the progressives moving forward.”
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