Gov. Kelly wants Kansans to get a $250 tax rebate. GOP calls it an election-year gimmick
Kansas Gov. Laura Kelly wants the Legislature to give every Kansas taxpayer $250 next year.
The $455 million proposal, which the governor announced Wednesday, would draw from the state’s anticipated $2.9 billion surplus for the 2021 fiscal year that ends in June.
Residents who file returns would automatically be eligible for the one-time, non-taxable, direct payment. Individual filers would be eligible for $250 while married couples filing jointly would receive $500.
The Democratic governor’s proposal comes as she and lawmakers grapple over how to spend the influx of cash hitting the state’s general fund. The Republican-controlled Legislature’s annual session begins Jan. 10.
If the state’s economic condition remains unchanged, analysts are predicting a $2.9 billion surplus by mid-summer and a $3.7 billion surplus the following year. It’s a sharp departure from the budget shortfalls Kansas experienced amid income tax cuts championed by Gov. Sam Brownback, reductions that lawmakers eventually rolled back.
Multiple factors led to the surplus, including costs offset by federal relief dollars and a swifter than expected economic recovery.
Kelly faces a tough re-election campaign in 2022 against likely Republican nominee Derek Schmidt, the attorney general. Both candidates have already endorsed cutting the state’s 6.5% sales tax on food at a cost of roughly $400 million.
“Since 2019, my administration has carefully worked to get Kansas’ budget back on track after years of mismanagement,” Kelly said in a statement. “Thanks to our fiscal responsibility and record economic development success, we can return money to taxpayers and give every Kansas resident who filed taxes in 2021 a $250 rebate. These are significant savings for every family to be delivered by summer of 2022.”
Schmidt’s campaign dismissed the plan as part of Kelly’s broader campaign strategy and Senate President Ty Masterson, an Andover Republican, called the plan an “election year revelation.”
“Between this, proposing a food sales tax cut after vetoing one in 2019, and pretending to oppose vaccine mandates while doing nothing to stop them, the election-year makeover of Laura Kelly’s politics is obviously underway,” CJ Grover, Schmidt’s campaign manager, said.
Kansas Republicans didn’t immediately reject Kelly’s proposal Wednesday but cautioned fiscal responsibility in deciding how to spend the cash and said they preferred long-term cuts. Last month, Schmidt said the Legislature should pay current bills, cut the food sales tax, pay down state debt obligations including within the pension system and “save the rest for a rainy day.”
“We’re not opposed to serious opportunities to give Kansans a break on their taxes,” House Speaker Ron Ryckman said in a text. “But, Kansans are smart, they can see right through Laura Kelly’s attempt to throw $250 their way right before her election. What our families need is long-term, sustainable tax reform, the kind Kelly has consistently vetoed.”
Sen. Rick Billinger, a Goodland Republican, said his priority is paying off the state’s existing debts and managing its pension system.
“There are hundreds of ideas on how to get rid of this money and I’m not sure we need to just be throwing money around to throw money around,” Sen. Rick Billinger, who chairs the Senate budget committee, said. “It may be a good idea, I’m not saying it is or isn’t … we’ll put it on the list with the rest of the stuff.”
Senate Minority Leader Dinah Sykes, a Lenexa Democrat, said in a statement that Kelly’s plan doesn’t pick winners and losers, “it provides relief for all Kansans in every corner of the state.”
“With leadership that consistently delivers record investment and a strong state general fund, all Kansans have the opportunity to benefit,” Sykes said.
Adam Smith, a Weskan Republican and chair of the House tax committee, said Kelly’s proposal to return money to the taxpayer “obviously makes sense” but that he tends to prefer long term tax relief for citizens.
Smith criticized Kelly for proposing a rebate after she vetoed a tax bill in April that increased the standard deduction for taxpayers by $500 while also providing cuts to multinational corporations and wealthy Kansans.
The Legislature overrode Kelly’s veto. At the time the governor said the legislation would threaten the state’s economic future and prioritized corporations and the wealthy over the majority of Kansans.
In an interview with The Star, Monday Kelly said the Kansas’s surplus dollars should be spent on one-time investments not long term cuts. She highlighted efforts to pay off debt and bolster the state’s rainy day fund but did not mention one-time rebates.
“This is an opportunity that Kansas hasn’t had for a long time, if ever,” Kelly said. “We’ll be looking at sort of one time investments that needed to be done for a very, very long time but we haven’t been able to.”
The Star’s Jonathan Shorman contributed to this report.
This story was originally published December 22, 2021 at 10:42 AM.
