April 26, 2012
TOPEKA House and Senate tax negotiators today reached agreement on a plan that would trim state income and sales taxes and provide some local property tax relief.
A tax-cutting provision previously passed by the House that would have eliminated the sales tax on food was not included in the package.
The plan would allow low-income, working Kansans to continue to claim the Earned Income Tax Credit, which Gov. Sam Brownback proposed eliminating. Or they could get a refund for taxes paid for food purchases, but they couldn't claim the refund and the earned income credit.
Legislative staffers now are putting together details of the plan and determining the potential fiscal impact on the state treasury, if the plan were to become law.
Those details are expected to be completed for review by the conference committee members on Monday. Presumably, the conference committee report would be finalized then and the measure could go first to the full Senate for consideration and then to the House, if it gains the upper chamber's endorsement.
Other elements of the plan:
On Wednesday, a group of 48 former GOP legislators called a press conference urging the governor and Legislature to rethink their plans to cut income taxes, saying that would shift more of the cost of government to poor and middle-income Kansans through greater reliance on sales and property taxes. Reduced income taxes also would undermine public school funding, they said.
"Property taxes now make up 35 percent (of state revenue)," said Rochelle Chronister, the group's chief spokesperson, "sales and use taxes almost 28 percent, income and privilege taxes almost 24 percent, leaving other miscellaneous taxes around 13 percent. The ideal balance would be one-third apiece, according to many tax experts, and Kansas is already out of balance with that concept."
The governor and others who support reducing or eliminating income taxes say that would lead to business and job growth.
When Brownback unveiled his plan to reduce the top rate to 4.9 percent, he said it would give Kansas the lowest top rate in the six-state region, second only to Colorado. Kansas currently has the fourth highest rate in the region that includes it, Colorado, Oklahoma, Missouri, Nebraska and Iowa. The highest top rate is 8.98 percent in Iowa. Colorado's rate is 4.63 percent, according to the Governor's Office.
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