The Kansas Legislature continues to be bogged down in the budget/tax process, and not much was accomplished last week in this regard. The Kansas Senate, who has a debatable proposal, decided to postpone their tax discussion till this Wednesday. The House plan remains in committee.
The Senate Plan – S. Sub. for HB 2109
- Increase sales tax to 6.5 percent; food at 6 percent;
- 50-cent cigarette tax;
- Eliminates all deductions but mortgage interest, charitable, and property taxes but accelerates the percent deductible;
- Increase motor fuel tax by 5 cents;
- Tax amnesty;
- Freeze income rates.
The House Tax Committee Plan – Sullentrop Plan
- Leaves the charitable deduction intact, accelerates the haircut on the mortgage interest, and property taxes paid and eliminates all other deductions ($97 million)
- Tax "guaranteed payments” of certain business entities ($23 million)
- Freeze the current income tax rates ($22 million)
- Increase sales tax to 6.5 percent and lower sales tax on food to 5.9 percent ($128 million)
- Increase state motor fuels tax by 5 cents ($81 million)
- 75 cents cigarette tax ($53 million)
- Increase liquor enforcement tax to 10 percent, sunsets after 1 year ($14 million)
- Tax amnesty ($30 million)
- Manage Care Organization Tax Agreement ($48 million)
The tax plan, at this point, is the major hold up. Both chambers are wary of increasing taxes but from the proposals being forwarded, it appears they are out of options. There is not much else that can be cut without going back on promises. It would not be surprising to have the House pass a tax plan that is merely concurred to by the Senate. After which the House would simply agree to the items in the Senate’s version of the state budget. This way the House would get some blame for raising taxes while the Senate gets blamed for having too big a government. There is not much good news in the Capitol these days so lessening the amount of blame might be the end game here.
With the tax plan being hammered out in committee for debate later this week the Legislature had ample opportunity to work on bills that failed to pass during the regular session.
The most notable from last week are as follows:
- SB 34 – Prosecutorial power to the Kansas Secretary of State. SB 34 gives the KSSOS independent power to prosecute election crimes. This was a very controversial idea given that local prosecutors and the Kansas Attorney General’s Office has power to prosecute these crimes. The bill passed 67-55 and is headed to the governor for signature.
- HB 2104 – Local elections. HB 2104 is another controversial bill that would move local elections from the spring to the fall of odd numbered years. This bill also repeals the presidential primary. HB 2104 passed 64-58 and is also head to the governor for signature.