Kansas legislative leaders are touring the state looking for momentum on a tax bill proposal that was unable to get through a veto by Gov. Laura Kelly this spring.
The proposal would have implemented a 5.15% income tax rate for all Kansans, decreasing revenue by an estimated $330 million annually. House Speaker Dan Hawkins explains why he feels the proposal still merits consideration in the 2024 session.
“Single rate tax really gives us the ability to ratchet down income tax when times are good. If we could get that single rate tax in, then if the economy stays good, people are doing well, revenue is coming into the state, we could ratchet that down just a little bit at a time,” he said.
The largely Republican-driven proposal also would have accelerated $40 million in tax cuts to corporations, provide for $40 million in residential property tax relief and would have ended the state sales tax on food a year earlier than planned. Hawkins says not a lot will change in the proposal, save for some potential property tax relief from the state level.
“One of the proposals I’ve got folks working on is to bring down maybe 2 or 3 mills — probably 2 mills — off of that. That’ll be some pretty good property tax relief the state can do and that’s where we can actually do it. We’ll see that in the proposal that will come out this next year,” he said.
Officials in both Riley and Pottawatomie Counties have lobbied in recent years for the legislature to start funding the Local Ad Valorem Tax Reduction (LAVTR) fund, which has been suspended since 2002. They say doing so, would create more opportunity for counties to provide meaningful property tax relief on counties and cities.
“The money is sitting in Topeka. Four billion dollars is sitting in reserves, and we’re not asking for all of it back, but it has been accumulated to the point of being worth a billion dollars that local taxpayers pay, duplicated by the fact that the state takes it, should be returned and they don’t,” says Dee McKee, commissioner for the 1st District in Pottawatomie County, and Kansas Association of Counties (KAC) board member for the Northeast District.
Riley County Commissioner Greg McKinley says the state has more than enough revenues to make this happen.
“One of the statistics somebody came up with that worked on it was almost $3 million that the county would see, lowering the mill levy three or four mills, if the state was funding it,” he said.
Speaker Hawkins says despite more push from counties, he does not believe there is much momentum from state lawmakers to have the LAVTR fund restarted.
“I think that us being able to give tax relief and ensuring that it’s there versus just sending money to the counties and hoping that they give tax relief, I think it’s better if we can do it at our level versus sending the money to them,” he said.
The Kansas Association of Counties, which includes both Riley and Pottawatomie counties, support legislative action to restart the LAVTR fund. More information about the fund can be found at kansascounties.org/legislative.
