Republicans are going to work on their version of a tax bill with an eye toward getting one passed in the Legislature and sent to the governor this week.
A conference committee convened last Thursday and started hashing out what a tax bill might look like with the chair of the Senate tax committee apparently poised to make a key concession to get the legislation passed.
“We may set a new record for getting the tax plan out,” said Republican state Rep. Adam Smith, chair of the House tax committee.
“I think we’re going to,” said Republican state Sen. Caryn Tyson, chair of the Senate tax committee.
The race to pass a tax bill comes in an election year with the state projected to have a $2.8 billion surplus at the end of the current fiscal year in June.
Smith said leadership wants to get a tax bill across the floor next week.
The conference committee plans to meet again Tuesday with the possibility of getting a bill to the Senate floor Wednesday afternoon.
Tyson said during Thursday’s meeting that senators would be willing to consider the flat tax rate that was approved in the House with 94 votes last year.
With bipartisan support, the House passed a bill with a 5.25% flat-tax rate, increased the standard deduction for single individual taxpayers and cut property taxes for schools as well as Social Security income. The Senate had passed a 4.75% flat tax.
In negotiations with the House, senators wanted a flat tax rate of 5.15%, which eventually cost the legislation Democratic support.
Ultimately, House and Senate negotiators settled on a 5.15% rate, which the governor vetoed and the Legislature couldn’t override.
“I will throw you a major, major softball,” Tyson told Smith on Thursday.
“The House was very gracious to us last year to come to 5.15,” she said. “We’re going to request the numbers for 5.25 so we can look at where you’re at and consider your position. Is that OK?”
Smith’s response: “I’m not going to disagree with that.”
The process is getting a jump-start because Republican leadership is eager to get something passed and sent to the governor and allow time for negotiation.
“Ty and I are very much bullish on getting a tax plan done,” House Speaker Dan Hawkins said this week, alluding to Senate President Ty Masterson.
The bill is starting in a conference committee where a tax plan can be inserted into a so-called “conferenceable” bill that has already been passed by one chamber.
It speeds up the process in a tax debate that has played out since the Legislature adjourned last spring.
Republican lawmakers are at loggerheads with Gov. Laura Kelly over what a tax plan might look like, with GOP leadership pushing a single rate structure and the governor proposing alternatives that have been embraced previously by the Republican-led Legislature.
Last year, the Legislature didn’t pass a tax bill until late in the session, giving lawmakers little time to respond after she vetoed the flat tax proposal.
Kelly has made it clear she opposes a flat tax because she believes it benefits wealthy taxpayers and does little for less affluent Kansans.
Her opposition means that Republicans will need a two-thirds supermajority, something that will be difficult to accomplish given that Republican Sens. Rob Olson of Olathe and John Doll of Garden City along with independent Dennis Pyle are supporting the governor.
Kelly wants to eliminate income taxes on Social Security, cut property taxes for schools, raise the standard deduction for income taxes, double the child care tax credit and provide a sales tax holiday for school supplies.
Republicans note that they have supported many of those proposals in the past.
“She’s stealing our agenda,” Masterson said in an interview.
“Those are our tenets,” Masterson said. “I get what she’s trying to do. She’s trying to create a sweet spot so you don’t get what’s really needed.”
In an interview Friday, Smith said the new tax bill will likely focus on property and income taxes.
Based on conversations with leadership, Smith said the new tax plan will likely be similar to what the House passed last year with the flat tax at 5.25%.
That bill would have increased the standard deduction for single individual taxpayers to $4,000 from $3,500 in tax year 2023.
It also would have raised the standard deduction for all taxpayers to account for cost-of-living adjustments starting in 2024.
The bill also would have increased the property tax exemption for the 20-mill levy for public schools from $40,000 of valuation to $80,000.
It also provided for the amount to increase in future tax years based on the average percentage change in statewide residential real property for the preceding 10 years.
It also would have gradually cut taxes on Social Security and would have cut taxes for banks and savings and loans.
Tyson on Thursday mentioned the possibility of increasing the personal tax exemption, which is $2,250 per individual and another $2,250 for disabled veterans.
“We know that helps people directly, especially people with disabilities,” Tyson said.
“We would like to help those people out as much as possible. I would really like a look at increasing those numbers.”
