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Capitol Focuses on Taxes

Posted By Joseph N. Molina III, Tuesday, May 12, 2015

This week is off to a rather quick start as House Tax committee worked throughout the day to put together the first tax package to help close the revenue shortfall for FY 16 and FY 17. The legislature is attempting to close a $406.4 million hole in FY 16 and a $367.9 million hole in FY 17. Attached is a spreadsheet from the Kansas Legislative Research Department that breaks down the revenue vs. expenditures for the next two years.


Three are a number of ideas on the table; the most prominent is closing the passive-income loophole. Closing the loophole could raise revenue by $133 million. Also of note is a statewide sales tax increase to 6.5%. This would provide an additional $165 million. Combine these two tax increases with the Managed Care Organization privilege fee of around $60 million and you begin to get close to a zero balance. However, these are not easy pieces of legislation to pass. Many conservative republicans are not fond of raising any taxes. Some would rather cut our way out and leave income tax rates were they are currently. This first tax package will be tested very soon.


Last week the Kansas House approved their version of the judicial budget (HB 2365) as well as the uniform family support act (SB 105) and the Business Entity Standardization act (SB 276).

The judicial budget was approved 108-10. That is significant since this issue will need to be negotiated with the Senate version (HB 2005). The House version provides nearly $5 million more state general funds in FY 16 and almost $9 million more SGF in FY 17. The House understands this issue and with such a large majority voting in favor it will be hard to walk away from their higher funding level proposal.


SB 276 BEST Act is headed to the governor now that it has passed both chambers. As will SB 105, UIFSA.


An interesting side note is that the House approved a measure allowing for the use of hemp oil to treat seizures and gave authority for industrial hemp to be studied.

 

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Tags:  budget  deficit  tax 

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