Bill vetoed that would have provided single-rate income tax, 0% food sales tax

13 News at Six
Published: Apr. 24, 2023 at 8:57 AM CDT
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TOPEKA, Kan. (WIBW) - Kansas Governor Laura Kelly has vetoed a bill that would have done away with the food sales tax by January 2024 as well as provide a single-rate income tax.

On Monday, April 24, Kansas Speaker of the House Dan Hawkins (R-Wichita) announced that Governor Laura Kelly has vetoed House Substitute for Senate Bill 169, single-rate income tax legislation.

“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.”

The bill would have provided an income tax rate of 5.15% for individuals and also would have decreased the normal tax for corporations while increasing the income limit for the income tax subtraction modification for social security income. It also would have increased the standard deduction by a cost-of-living adjustment.

“State tax receipts have climbed nearly 30% during the last three years. Offering modest tax relief to Kansans struggling to pay for daily necessities seems to be a no-brainer,” said Kansas Chamber President and CEO Alan Cobb. “Governor Kelly vetoed tax changes in 2019, 2020, and 2021, saying those proposals would destroy the state’s budget. They didn’t. And this plan won’t either. The truth is, if you make more than $30,000 in Kansas, right now you are paying 5.7% in income taxes. This plan vetoed by Governor Kelly would establish a single rate of 5.15% on all income. We urge the Kansas Legislature to override this veto to provide Kansas taxpayers the relief they so need.”

Lastly, the bill would have discontinued the food sales tax credit for a flat 0% - a move the Governor has championed in the past. It would have gone into effect in January 2021.

Instead, Kelly announced at Elmont Elementary School in the Seaman School District USD 345 that she has proposed a one-time tax rebate. Couples would receive $900 while those who file as individuals would receive $450 per person.

The Governor said the bill would have overhauled the state’s tax structure and would cost about $1.3 billion over the next three years. She said the move would pose a threat to public education funding.

“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,” Kelly said. “In my first term, I made a commitment to getting our state back on track. I’m proud of how far we have come, but we can’t risk turning back now. 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.”

Kelly indicated that had the bill passed, middle-class taxpayers only would have seen savings of less than $100 per year. She said her rebate provides relief to all taxpayers and does not jeopardize funds.

“Governor Kelly’s re-election was a direct rebuke of unsustainable tax packages like SB 169 — the so-called ‘flat tax’ bill. Voters made it clear in November: They don’t want to go back to Brownback-era financial instability, and that’s exactly where SB 169 would take us. Her veto, I’m sure, will be welcomed by families across the state. It’s certainly welcomed by mine,” said House Democratic Leader Vic Miller. “Less than two months ago, Kansans received property valuation notices and flooded our voicemails with warranted fears about being taxed out of their homes. SB 169 provided woefully inadequate relief for families, particularly for residential property taxes — a serious concern for thousands of families across Kansas. Despite having an affordable package of property tax cuts in front of them, ready for a vote, the GOP gave tax breaks to corporations and the super-wealthy. But that’s the GOP way, I suppose.”

Kansas Senate President Ty Masterson issued a statement following Governor Kelly’s veto decision.

“The governor’s veto and gimmicky proposal reveals a stark truth – she believes that taxpayer money belongs to the government, for politicians to dole out in one-time ‘payments’ rather than recognizing the money we collect belongs to the people and that we should simply let them keep it,” said Masterson, who added, “The governor’s big-government approach is a replica of the failed policies of the Biden administration that have sent prices soaring and created instability in our economy.”

Masterson pledged a vote to override the veto.

“While the governor believes it’s her money, Republicans believe it’s your money. We will act to provide Kansans the long-term relief they need at the grocery store, in their retirement funds, and in their paychecks.”

To read the full text of the bill, click HERE.