The longest legislative session in Kansas history came to an end on Friday, June 12. The 113-day session is a full five days longer than the previous mark. The total cost of the overtime session is around $989,000. To put it another way, 20 teachers could have been hired for an entire year with the money used in the Veto Session.
The Legislature also set a personal best by passing the largest tax increase in Kansas history. New taxes will increase by $384 million, with an addition $47 million from managed care organizations for the privilege of offering health care plans in Kansas.
The tax plan passed the Legislature by the narrowest of margins, with 63 votes in the House and 21 votes in the Senate. Not one Democrat voted for the tax plan in either House. The plan itself is a mashup of proposal to secure votes from each faction. The tax plan includes:
- Increase the state sales tax to 6.5 percent, which generates an estimated $164 million;
- Raise tobacco taxes by 50 cents per pack to generate $40 million;
- Protects exemption passed in 2012 for 330,000 businesses that shields income for these LLCs from taxation, including owners salary and draws;
- Wipes out itemized deductions, yielding $97 million;
- Retained the Food Sales Tax Credit program but dropped plans to LOWER the sales tax on food to 4.95 percent;
- Continue the governor's "March to Zero" on income taxes by accelerating the triggering mechanism that will force even further income tax rate reductions in 2019; and
- Offers a tax amnesty plan worth $30 million.
The most troubling part of this plan is that it does not actually close the budget shortfall. It leaves a nearly $50 million hole. The governor will have to do allotments/cuts to get the budget balanced prior to June 30. In addition, this tax plan does nothing to solve the revenue problem. Expect taxes to be an issue into the future until a consistent revenue stream is found.
This was a very difficult session and long hours increased the stress level in the Capitol. The final product is not one that has garnered much positive attention.
See http://www.therepublic.com/view/story/8b2094125e73422fa387bd172670a414/KS--Kansas-Taxes; see also http://taxfoundation.org/blog/kansas-approves-tax-increase-package-likely-will-be-back-more; http://www.kansas.com/news/politics-government/article23827492.html; and finally, http://kansaspublicradio.org/kpr-news/kansas-house-approves-tax-bill-after-overnight-debate.
Now we wait and see if revenue numbers pick up and hope that the fall off from an increased sale’s tax is small enough not to eat into the already slim ending balance.
The official close of the session, also called Sine Die, is scheduled for June 26 at 10 a.m. This is purely ceremonial and no business is on the agenda. It also marks the opening of campaign contributions season. Look for those in your mailbox.
In the meantime please take a look at the Kansas Legislative website for summary of bills that have passed and been signed into law. Here are links to these summaries.
Summary of Legislation:
Another summary is due out in July.