Gov. Kelly, Kansas Republicans offer dueling tax cut plans as revenue surpasses estimates
Kansas will end the fiscal year with nearly $26 million more in tax receipts than originally estimated, prompting new criticism from Kansas Republicans of Democratic Gov. Laura Kelly’s decision to veto a bill that would have created a flat income tax.
Kelly’s office announced Wednesday that the state would end the 2023 fiscal year with $10.2 billion in tax receipts. That was $25.9 million more than Kansas fiscal analysts predicted when they updated the state’s estimates in April.
The revenue followed a pattern that has been consistent as Kansas’ economy recovers from the COVID-19 pandemic and inflation results in additional sales tax revenue.
Kelly applauded the receipts, saying it comes as a result of her administration’s efforts to attract businesses and grow the Kansas workforce. She called for “responsible” tax cuts.
“This past legislative session, I fought for responsible tax cuts on groceries, property, and Social Security to put this money back in the hands of working Kansans,” Kelly said in a statement. “Come January, I am committed to partnering with legislators to get Kansans relief.”
Kelly had sought an immediate elimination of food sales tax as well as reduced taxes on Social Security benefits this year. The GOP-controlled Legislature included those policies in a broader tax package that would have created a flat income tax of 5.25%. Kelly vetoed the policy, arguing the flat tax would decimate the state’s budget over time.
According to an analysis from the Kansas Department of Revenue, the bill would have provided around $3,000 in annual tax cuts to Kansas’ highest earners while Kansas’ lowest earners would receive less than $50 annually in tax cuts.
Kansas lawmakers ultimately left Topeka this year without passing any major tax cuts into law despite record surpluses.
The continued surplus drew immediate criticism of Kelly’s veto from Republican leaders in the Legislature.
Senate President Ty Masterson, an Andover Republican, argued the flat tax would have done more for economic development in Kansas than the incentive programs promoted by the Kelly administration.
“The Kelly/Toland Administration celebrating the government collecting more of the people’s money at the same time their policies are shrinking private sector jobs is indicative of why progressive tax policies and other left-wing ideas are doomed to fail in comparison,” Senate President Ty Masterson, an Andover Republican, said. “ A rising tide lifts all boats, which is why we need broad tax reform that puts more money in the pockets of every Kansan while putting our state on a glidepath to economic growth.”
House Speaker Dan Hawkins, a Wichita Republican, said the policy “fell victim to petty politics.”
“Rest assured, the legislature will bring back these cuts next session and passing them will be top priority,” Hawkins said.
This story was originally published July 5, 2023 at 2:55 PM.
