Kansas Gov. Laura Kelly rolls out new tax cut plan with support from key GOP lawmakers
In an opening salvo to tax negotiations, Kansas Gov. Laura Kelly rolled out her latest plan Monday morning with the support of two Republicans and an independent who delivered key votes to kill the GOP-proposed flat income tax last year.
Kelly’s plan, which she announced hours before the Kansas House and Senate gavel in to formally begin the 2024 legislative session, makes slight adjustments on her 2023 proposal. It includes the elimination of taxes on social security and sales tax on certain items alongside changes to income and property tax.
Kelly presented her plan for tax cuts, which would cost $439.5 million in its first year and around $325 million annually after fully implemented, as a responsible alternative to the GOP-backed flat tax.
She secured the support of key sponsors on the bill including Republican Senators Rob Olson of Olathe and John Doll of Garden City and Sen. Dennis Pyle, a conservative Independent from Hiawatha who left the Republican party to run for governor in 2022. All three senators voted against overriding Kelly’s veto on the GOP flat tax bill last year, though Pyle and Olson supported the legislation in earlier votes.
“I know that we are not a likely group, I don’t think anyone had this team on their 2024 predictions list,” Kelly said. “But here we are, united in our desire to cut taxes for every single Kansan, not just a few at the top.”
Supporters of the flat tax argue it reduces taxes for all Kansans while making the state more attractive for potential employers. But Kelly and her allies argue it gives the largest tax break to the most wealthy Kansans, leaving the middle class behind.
The rollout sets up an early political fight between Kelly and GOP leadership. In an interview with The Star last week House Speaker Dan Hawkins, a Wichita Republican, said a single rate tax was a must-have for any tax plan he would support.
But, Kelly has pledged to veto any bill with a flat tax. Republicans need 27 votes to override Kelly’s veto. If Pyle, Olson and Doll continue to work with the governor, the voting block would be enough to effectively tank any GOP plan that doesn’t have the support of Kelly or other Democrats.
Pyle, who has long feuded with GOP leadership in the Senate, said the governor’s office reached out to him following his vote to sustain her veto last year.
“I definitely want to cut taxes,” Pyle said. “I think we could have reached an agreement had the leadership been willing to pull out the single rate but they’re unwilling to do that and you’re still hearing that as their mantra today.”
“I just don’t think they have the votes.”
Senate President Ty Masterson, an Andover Republican, said Olson and Pyle’s partnership with Kelly was no surprise.
“Any serious plan must reform our tax structure so we can enjoy sustainable economic growth that benefits all Kansans,” Masterson said in a statement. “Now that the political games are over and we know which team everyone is on, it’s time to work towards a compromise that accomplishes that goal.”
Kelly’s plan would immediately eliminate sales tax on food, diapers and feminine hygiene products. It would stop all state taxes on social security income, increase the exemption on statewide residential property tax and raise the standard deduction for Kansans paying income tax.
It also establishes a back-to-school sales tax holiday and increases the size of the state’s child care tax credit.
Republicans have not yet rolled out their tax plan but have signaled it will include a flat tax alongside cuts to income taxes on social security and an increase to the standard deduction.
Rep. Adam Smith, a Weskan Republican who chairs the House Tax Committee, noted that many of Kelly’s proposals were included in the bill she vetoed last year.
He said he agreed with some items in it but disagreed with Kelly’s objection to a single rate tax and believed pieces she included, like the sales tax exemption for hygiene products and a back to school sales tax holiday, were bad policy.
“I think she’s put together a fiscally responsible tax package, she’s obviously done it with some political strategy getting certain senators on board,” Smith said. “We’ll just have to see how things play out here and where the votes fall.”
GOP leaders were quick to dismiss Kelly’s plan as political gamesmanship.
“A simpler, single rate tax is needed to keep Kansas’s economy competitive with surrounding states, “ Hawkins said in a statement. “I’m disappointed but not surprised to see the Governor playing politics with taxpayer’s money once again.”
Senate Vice President Rick Wilborn, a McPherson Republican, said the sponsors on Kelly’s plan may not be an immediate death knell to the single rate proposal.
“You never know, there are some Democrats behind the scenes who have told us they like it,” Wilborn said.
This story was originally published January 8, 2024 at 11:46 AM.
