Gov. Laura Kelly has vetoed a measure that aimed to implement a flat tax rate of 5.15% for all Kansas taxpayers.
The governor noted in a release the plan would cost the state $1.3 billion over the next three years, putting public education funding at risk. The governor countered to spend the one-time budget surplus on a $450 tax rebate for individuals and $900 for married taxpayers filing jointly. The total cost of the one-time rebates would be $800 million.
The governor issued a statement Monday explaining her decision.
“Our public schools were one of the biggest victims in the legislature’s last tax experiment and are one of the many services that would take a hit should this bill become law… I’m calling on legislators to put this one-time surplus back in the hands of taxpayers — without risking our ability to continue fully funding schools and investing in roads, bridges, and essential services.”
Kansas House Speaker Dan Hawkins issued a statement following the governor’s veto Monday.
“In these times of economic uncertainty when Kansans need tax relief more than ever, it’s especially careless and out-of-touch for Governor Kelly to veto this broad, sustainable tax policy that provides tax relief to ALL Kansans. SB 169 provides income tax relief regardless of income level, a reduction of the tax on Social Security, a faster end to the food sales tax, tax relief for small businesses, a simpler single income tax rate, and a reduction in residential property taxes. This tax relief passed the House with a bi-partisan super majority and we intend to override the Governor’s veto for the benefit of all Kansas taxpayers.”
Hawkins is urging the legislature to override the veto. The tax bill (Senate Bill 169) advanced 85 to 38 in the House, then 24 to 13 in the Senate, with three Republicans absent. To override the governor’s veto Republicans need 84 votes in the House and 27 in the Senate.
In addition to creating a 5.15% income tax rate for all Kansans, regardless of earnings, the bill would fast-track $40 million in annual tax cuts for corporations, end the state sales tax on food by Jan. 1, 2024 and trim the residential property tax exemption from $80,000 to $60,000.
