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Topeka Senate Vice President Jeff King is picking up where Gov. Sam Brownback left off in taking aim at the Earned Income Tax Credit, a refundable tax credit designed to help low-income wage workers and their families.
But unlike Brownback, who last year wanted to eliminate the credit to help pay for his proposed income tax cuts, King is pushing for support of a bill that would cut nearly in half the state version of the EITC and use that revenue to expand a property tax refund program for disadvantaged Kansans.
"Every dime of the money from the EITC will be used to help the elderly, low-income families and the disabled pay the property tax burden that is placed on them," said King, R-Independence. "It will help them keep their homes, help them stay in the state," he said.
But supporters of the EITC say one needy group shouldn't be helped at the expense of another.
"I have sympathy for Senator King’s desire to assist his constituents with property tax relief," said Sister Therese Bangert, of the Sisters of Charity of Leavenworth. "However, taking resources from working, low-income families is not a good solution and does not promote tax fairness," Bangert said.
Last year, the governor sought to eliminate the state portion of the EITC. The plan was to take two thirds of the savings and use those dollars to attract more federal dollars for programs designed to help low-income families. The remaining third of the savings was to go toward increasing the standard state income tax deduction.
Brownback ended up signing into law sweeping income tax cuts but the EITC was left standing after a furious pushback. This year, Brownback proposed more tax cuts, but didn't touch the EITC.
More than 200,000 Kansas families receive the EITC and the average state portion is $380 per household.
"In Kansas, the state EITC lifts thousands of children and families from poverty each year," said April Holman with Kansas Action for Children.
King's bill would cut that credit nearly in half, reducing the Kansas EITC from 17 percent of the federal credit to 9 percent. That would save the state $42 million, according to the Kansas Department of Revenue.
Under the bill, those revenues would be used to expand the Homestead Property Tax Refund program by raising the income threshold from $32,400 to $34,400, and increasing the maximum refund amount from $700 to $1,200.
"The disabled who aren't working are not helped at all by the EITC," King said. "They're helped dramatically by the homestead program. Your fixed-income seniors, who are in many parts of the state, including my own, forced out of homes they've lived in, due to tax burdens, sometimes forced across state lines because of lower property taxes, they're helped by the homestead and not the EITC," he said.
But Bangert said, "The elderly who are being forced to leave their homes from high property tax rates should be a separate concern for legislators. The two populations should not have to be in competition for the state’s resources," she said.