A top Republican in the Kansas House brushed aside criticism Friday that an income tax relief plan nearing final passage risks repeating a tax-cutting experiment that failed a few years ago, suggesting the new proposal is akin to finding and returning “a billfold filled with money.”
The bill the GOP-controlled Kansas House approved 76-43 contains proposals from top Republicans for preventing individuals and businesses from paying higher state income taxes because of GOP-championed changes in federal tax laws at the end of 2017. The measure, which Democratic Gov. Laura Kelly could ultimately veto, also includes a small cut in the state’s sales tax on groceries.
“It’s kind of like finding a billfold filled with money with a driver’s license on the street,” said House Majority Leader Dan Hawkins, a conservative Wichita Republican. “Do you turn it back to them, like you should, or do you keep it? No, we don’t keep it.”
Democrats have ramped up their criticism that the bill revives tax-cutting policies under former conservative Republican Gov. Sam Brownback in 2012 and 2013 that became nationally notorious. Budget problems that followed were so serious and persistent that even GOP voters saw the experiment as a failure — and bipartisan legislative majorities rolled most of it back in 2017.
“It’s similar to the Brownback tax experiment,” said House Minority Leader Tom Sawyer, a Wichita Democrat. “It’s a step back to what we just got out of.”
Republican leaders contend it’s wrong to see this year’s bill as repeating the Brownback tax experiment. They argue that they’re simply heading off an unintended increase in state taxes.
The Republican-dominated Senate last month approved a version of the bill without the sales tax cut. It expects to decide next week whether to accept that proposal or force House members to negotiate. If senators accept the House’s version, the bill will go to Kelly.
The federal tax overhaul in 2017 cut federal income taxes for individuals and businesses but included provisions expected to raise revenues in some states. One federal change discouraged filers from claiming itemized deductions.
The bill would allow filers to itemize on their state returns even if they don’t on their federal returns. That provision and the cut in the sales tax on groceries to 5.5 percent from 6.5 percent are designed to give Kelly incentives to sign the bill, despite her misgivings.
But businesses would receive almost two-thirds of the $209 million in tax savings projected for the state budget year beginning in July, and Democrats have attacked the measure as a corporate give-away.
Many legislators in both parties expect Kelly to veto the bill, giving moderate Republicans some political cover when voting no could stir up conservative primary election voters. But supporters of the bill argue that voters are upset over possibility having their taxes rise without any action by the Legislature.
“They realize this was an unintended consequence of the federal bill from a couple of years ago,” said Jeff Glendening, a lobbyist for the anti-tax group Americans for Prosperity.
While Kelly stopped short of threatening to veto the bill during a Friday news conference, she said, “Another way that you could look at it is that it’s an unfunded federal mandate.”
The House’s vote and the Senate’s 26-14 vote in February were short of the two-thirds majorities that GOP leaders would need to override a veto.
“We need to let the dust settle on our revenue situation,” Kelly said.