The 2015 legislative session finally adjourned on Friday June 12th. It was the longest session in Kansas history lasting 113 days - 23 days longer than the typical 90 day session. Progress this session was continuously stalled by Republican infighting and gridlock, as the legislature debated how to finance the 2016 budget. I will have to return to Topeka next Friday, June 26th, for the ceremonial last day of the legislative session, known as Sine Die.
It remains an incredible honor to represent our community in the Kansas House of Representatives. I am glad to be home and I look forward to seeing and speaking with all of you again. Please do not hesitate to contact me, even though the legislative session is over. I am always happy to address your concerns and to be helpful in any way possible. You can reach me by calling the legislative hotline at 1-800-432-3924 and leaving a message or by emailing me at email@example.com
In order to fill a $400 million deficit, the legislature approved the single largest tax increase in Kansas history this session, totaling more than $1.5 billion over the next three years. I voted no because the tax increases are not responsible, equitable, or sustainable.
In 2012 the Governor pushed through his failed economic experiment, which resulted in more than 330,000 Kansas businesses paying nothing in state income taxes; subsequently the state has lost more than $1 billion in revenue over the past year. Kansas cannot deficit spend, so the legislature had to pass a tax plan this session to balance the state’s budget.
Kansas already has the 9th most unfair tax structure in the country because poor, middle class, and working families pay a disproportionately high amount of their income in taxes, and this plan only makes it worse by:
- Increasing sales tax from 6.15% to 6.50%
- Eliminating and reducing itemized income tax deductions
- Raising sales tax on cigarettes by $0.50, from $0.79 to $1.29
- Granting a tax amnesty period allowing individuals to pay back taxes without penalty
- Taxing certain business wages
Changes to Sales Tax
The plan generates more than a third of the total revenue by raising sales tax from 6.15% to 6.50%, effective July 1, 2015. As a result Kansans will now pay more for everyday necessities, and middle class and working Kansans will now unfairly pay a larger percentage of their income in sales taxes.
Eliminating/Reducing Itemized Reductions
The tax plan will eliminate nearly all of the itemized deductions taxpayers may use when filing state income taxes, including deductions for medical expenses. The property tax and mortgage interest rate deduction will be reduced by 50%. The itemized deduction on charitable contributions is the only deduction unaffected.
Increasing Sales Tax on Cigarettes
The bill increases the cost of cigarettes by $0.50, from $0.79 to $1.29 per pack. Raising the rate pushes Kansas’ tax on cigarettes to the highest in the region and risks losing sales across state lines. Similar to sales tax, taxes on cigarettes unfairly affect middle class and working Kansans. The bill also includes a tax on electronic cigarettes of 20 cents per milliliter of consumable material starting in July 2016.
The tax plan includes a tax amnesty period, which will allow individuals who owe back taxes to pay their taxes, in full, without penalty. The 45 day amnesty period will begin on September 1, 2015 and end on October 15, 2015 and is estimated to generate $30 million dollars. Kansas has had an amnesty period as recently as 2010, so it is unlikely the program will generate the amount of revenue expected.
Taxing Certain Business Wages
The tax plan would tax what is known as “guaranteed payments,” modifying a 2012 policy that ended income taxes on the profits of 281,000 business owners and 53,000 farmers. Income taxes will have to be paid on any payments they guarantee themselves from their businesses, regardless of their profits, at the current lowest rate of 2.7%. Businesses may simply get around this by restructuring the way their wages are paid out to avoid taxes.
Delaying Income Tax Reductions
Part of the governor’s “march to zero” income tax included reducing personal tax income tax rates. The bill would continue to reduce income tax rates, but would make smaller reductions in 2017 and 2018 than originally planned. Rather than solving the root cause of the problem, Governor Brownback’s failed economic experiment, this bill continues to irresponsibly cut taxes.
The new tax plan balances the budget on the backs of middle class and working families. It is unfair to raise taxes on millions of Kansans to subsidize a failed economic experiment that protects tax breaks for big businesses and the wealthiest of Kansans.
Earlier in the session, the legislature approved a budget that does not meet the needs of Kansas. I voted no. The budget for 2016 makes it clear Kansas does not prioritize sound infrastructure, education, or public safety.
The 2016 budget:
- Takes more than $350 million from the State Highway Fund, which is proven to create jobs and improve the quality of our roads
- Does not invest additional money into K-12 or higher education, which are already underfunded.
- Does not increase salaries for state employees, who haven’t received a pay increase in years.
- Does not adequately fund the judicial branch, which is charged with keeping our communities safe.
- Does not provide additional funding to the Kansas Highway Patrol, which is more than 100 officers short.
The budget ignores some of the state’s most important needs, and relies on funding from one time revenue sources. This sort of budgeting process is not sustainable. Kansans want and deserve better.