Kansas Needs Comprehensive Tax Reform

Today’s guest post is brought to you by Heidi Holliday, Executive Director of Kansas Center for Economic Growth.

Today is Day 108 in the Kansas Legislature. After a weekend of stop and go action on budget, school finance, and tax plans, the Legislature is starting the sixth week of the veto session having yet to resolve these three crucial issues.

Yesterday, members of the House K-12 Education Budget and Senate Select Committee on Education Finance Conference Committee reviewed a proposal to bundle an income tax bill into the school finance bill. The proposal also included a “trailer”, or companion, bill that was sent to Tax Conference Committee to address credits, deductions, and some economic development policy components.

The income tax portion of the blended bill (CCR for SB 19) had a few different components, but the biggest one was that all individual income tax revenue would be dedicated to education. The bill included a three tier income tax structure in addition to ending the so-called “LLC loophole” and the March to Zero.

The trailer bill (CCR for SB 30) included a combination of income tax credits and deductions, including phasing back the Child and Dependent Care Credit (to pre-Brownback levels, or 25 percent of the federal rate), and phasing back in deductions for medical expenses, mortgage interest, and property tax. The trailer bill also included several economic development programs. The two bills (CCR for SB 19 and CCR for SB 30) were written in a way that one could not become law without the other passing.

The Rise Up, Kansas coalition opposed CCR for SB 19 for several reasons. First, the bill missed the revenue target established by the most recent income tax bill (CCR for HB 2067) that passed the Senate last Tuesday. Both chambers have heard and passed better tax policy bills, and we believe CCR for SB 19 is a step backwards.

We also believe that keeping school finance and comprehensive tax reform separate is vital to giving both issues the attention and diligence they need. Far too many unanswered questions surrounded the bundled bill. Fortunately, the House of Representatives agreed and voted to reject the proposal with a final tally of 32-91.

Meanwhile, a bi-partisan group of (mostly) female legislators has been working on a clean comprehensive tax reform proposal. This proposal addresses many of the concerns being expressed in response to last Tuesday’s vote on CCR for HB 2067.

The women’s caucus proposal meets the criteria for comprehensive tax reform that the Rise Up, Kansas coalition has set: it closes the LLC loophole, ends the March to Zero on income taxes, and reinstates a third income tax bracket to re-balance the Kansas tax structure. The proposal also includes a number of components meant to help Kansas families, including phased restoration of some of the credits and deductions Governor Brownback and legislative allies used to “pay for” unaffordable and damaging tax policy. While this proposal has not yet been introduced in bill form or via a conference committee proposal the discussions have been effective in gathering input and ideas from a broader coalition of policymakers.

It’s going to take time for the state to rebuild once we end Governor Brownback’s tax disaster. While we won’t be able to entirely restore Kansas’ fiscal health this year, it is time to end the state’s failed tax experiment. Lawmakers must take the first critical step forward for Kansas in 2017 with comprehensive tax reform that stops the bleeding and puts Kansas on the road to recovery.

Your voice is critical in this debate. If you don’t already receive action alerts from the Rise Up, Kansas coalition, sign up online here: http://riseupkansas.org/get-involved/

Remember to do more than vote. Get informed. Get involved. Make a difference.

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published this page in Blog 2017-06-05 18:47:27 -0500
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