The Kansas House on Friday overrode Gov. Laura Kelly’s veto of a new tax bill that she said was too expensive and would put the state’s fiscal health at risk.
The House voted 104-15 to override the veto of the bill, which would cost about $1.56 billion over three years and would move the state to a two-tier structure with the bottom bracket eliminated.
The bill, which drew bipartisan support, now moves to the Senate where questions persist about whether there are enough votes to override the governor.
Republicans said the new tax bill was sustainable regardless of claims made by the governor, whose staff produced a profile showing it would put the state in the red by nearly $400 million in 2029 albeit with a rainy-day fund of about $2 billion.
They pointed to new revenue estimates that show the state has a stable-to-positive fiscal outlook with the state holding roughly $3.6 billion in reserve in fiscal 2025.
Republican state Rep. Adam Smith, chair of the House tax committee, questioned Kelly’s commitment to fiscal responsibility given the state’s spending trend since she was elected.
During her two terms in office, Smith said all-funds spending has increased 57% to $25.1 billion for 2025 from $15.9 billion in 2018.
He said state general fund spending has increased to $10.4 billion from $6.6 billion during that same period.
“It would sure be nice if Gov. Kelly was the same fiscal hawk when it came to the budget that she tries to be when it comes to tax relief,” Smith said.
Smith was astonished that the governor vetoed the tax bill over a $35.7 million yearly difference between the cost of the tax plan approved by the Legislature and a plan that she urged lawmakers to consider when they returned to work on Friday.
“Really? Are you kidding me?” Smith asked. “According to the governor, the difference between a successful, robust economy and state and a state of financial ruin is $35 million.
“We spent more than that on a soccer tournament,” Smith said, alluding to the $28 million in the budget for the World Cup to be held in Kansas City.
“Where was the governor’s intense fiscal scrutiny during that decision or any of the other discretionary spending in our $25 billion budget?” he said.
Fifteen Democrats voted against the bill, including House Minority Leader Vic Miller, who earlier in the week acknowledged that he was undecided about how he would vote on the attempt to override the governor.
“If you vote to override the veto on this tax plan, you are voting to seed the rainy-day clouds and bring a fiscal storm back to Kansas,” said Democratic state Rep. Mari-Lynn Poskin of Leawood.
“If you have a single fiscal-responsibility bone in your body, I pray it is in your spine. I urge you to vote ‘no’ on the motion to override,” Poskin said.
Democratic state Rep. Henry Helgerson of Eastborough said he wasn’t dissuaded from supporting the tax plan regardless of dire predictions about the fiscal impact.
“Even though the projections show we’re going to have financial hard times, I’m voting for this bill,” Helgerson said.
“The public demands reductions in the taxes,” Helgerson said.
“If you won’t put budgets together that are financially balanced, then we give it back to the taxpayers and force it this way,” he said.
Democratic state Rep. Nikki McDonald of Olathe has concerns about cost.
“While I am committed to reducing taxes for all Kansans this year, my vote reflects concerns about the cost of this tax bill and our ability to sustain this level of tax cuts,” McDonald said.
“We must fully fund public education, including special education. The ramifications of passing an unsustainable tax bill could jeopardize our ability to honor this important commitment,” McDonald said.
The bill headed to the Senate lowers income tax rates, increases the personal exemption, eliminates state income taxes on Social Security, accelerates elimination of the sales tax on food and increases the standard deduction.
The plan, which originally passed in the House unanimously, would move the state to a dual-tiered structure with income tax rates of 5.55% and 5.15%. Those rates are now set at 5.7% and 5.25%. The lowest bracket would be eliminated.
The income threshold for the 5.15% tax bracket would change to earnings up to $23,000 for single filers and $46,000 for joint filers. The threshold for the lowest bracket in Kansas is now $15,000 for single filers and $30,000 for joint filers.
The new plan still eliminates the income tax on Social Security benefits and accelerates the elimination of the food sales tax to July 1.
It also increases the residential exemption on the state’s 20-mill property tax rate from about $42,000 to $100,000. It lowers the property tax rate to 19.5 mills.
The new plan increases the state’s personal tax exemption for single filers to $9,160 from the current level of $2,250 person. For joint filers, the exemption would increase to $18,320. The exemption would be $2,320 for dependents.
Fiscal analysts said while it may appear on paper that the new plan would increase taxes, significant increases in the personal tax exemption ensure there will be a cut.
The plan also calls for a 3% increase in the standard deduction. It would increase the standard deduction to $3,605 for single filers, $8,240 married joint filers and $6,180 for head of household.
