Topeka ? Gov. Kathleen Sebelius said Thursday that she would expect the Legislature to act quickly next year to maintain state taxes on stock dividends removed from federal taxes by Congress and President Bush.

With Bush and Congress agreeing to cut federal taxes on stock dividends, Sebelius said when state lawmakers returned in January they would need to “decouple” Kansas tax law from the federal changes.

“It would be a complicated process,” Sebelius said.

“We could pass a measure at the very beginning of next session and still essentially capture those funds, so there is still an opportunity. They’d have to move very quickly,” she said of the Legislature.

Bush indicated Thursday he would sign a $330 billion tax cut, which includes reductions in taxes on dividends paid to stockholders.

Anticipating such a move during the just-completed legislative session, the state Senate passed a bill that would have allowed Kansas to continue collecting state taxes on dividends. But the measure died in the House.

Sebelius has said the failure of that bill was one of her biggest disappointments of the session.

Officials have estimated that Kansas state government would lose $50 million if it didn’t maintain the state tax on dividend income. Currently, state income tax law essentially piggybacks on the federal tax.

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“Frankly, that policy is enormously costly in an era when we don’t have $50 million to lose out of our state budget,” said Sebelius, a Democrat.

In Congress, part of the Senate tax-cut package would provide $20 billion in aid to the states.

Sebelius said she would welcome any help from the federal government because many increases in the state budget were needed to fulfill requirements in federal laws, such as the new No Child Left Behind education bill and changes in required health care.