Kansas House puts full repeal of Brownback’s 2012 tax cuts up for consideration

Kansas state Reps. Leo Delperdang, left, R-Wichita, and Kent Thompson, R-Iola, watch as the House approves a bill raising new revenue by eliminating exemptions to the state's sales tax, Monday, May 15, 2017, at the Statehouse in Topeka, Kan. The bill imposes the tax on a few services that have not been taxed, and both lawmakers support it. (AP Photo/John Hanna)

? In a surprise move late Monday, Kansas House tax negotiators offered a full repeal of the tax cuts that Gov. Sam Brownback championed in 2012, a plan that some Democrats have been calling for since those cuts were made, but one that appears unlikely to pass.

House Taxation Committee Chairman Rep. Steven Johnson, R-Assaria, offered that plan in a late-afternoon conference committee meeting with Senate counterparts.

“I’m speechless,” said a shocked Sen. Caryn Tyson, R-Parker, who then said Senate negotiators wanted to think about the proposal overnight.

Later, she told reporters that she “absolutely” thought it was a serious proposal on the House’s part, but added, “I don’t think it’s going anywhere.”

The offer came just hours after the full House passed and sent to the Senate a bill that would take Kansas tax policy in a vastly different direction. It would repeal a number of sales tax exemptions on various services to generate about $60 million a year starting in the fiscal year that begins July 1. But it would also lower the sales tax rate on food by one percentage point starting in 2020, which would then offset the increased revenue.

The three Democratic House members from Lawrence — Reps. Barbara Ballard, Boog Highberger and John Wilson — all voted against that bill. Republican Rep. Tom Sloan of Lawrence voted in favor of it.

Highberger said in a written explanation of his vote that the sales tax changes would make it more difficult to pass a larger income tax reform bill, and that the savings to most families from the 1-cent sales tax reduction would only amount to about $1 per week, assuming the lower rate is allowed to take effect in 2020.

“These changes should be done as part of a comprehensive tax plan, with full hearings so we can hear from all of the parties affected,” Highberger said in the written statement that was co-signed by four other House Democrats.

It was believed after that vote that House leaders were working toward a toward a solution that would include a combination of sales tax exemption repeals and income tax increases to balance the state’s budget and pay for an increase in K-12 education funding.

“We’re looking for a number of plans that different folks are behind,” Johnson said when asked if House leaders were supporting the proposal. “This is one that’s been talked about in different areas. I don’t know that anyone wants complete ownership, but it’s one that was talked about during the campaign.”

A few hours after the vote in the full House, a House committee finally advanced a bill for a new school funding formula that would increase education funding only $280 million over two years, a drastic reduction from the five-year, $750 million plan the committee had been considering up to that point.

According to the Legislature’s nonpartisan Research Department, full repeal of the 2012 tax cuts starting July 1 would generate $649.5 million in the upcoming fiscal year and $772 million in the fiscal year after that.

It would restore a three-bracket tax system where the lowest wage earners would pay 3.5 percent tax on their taxable income instead of the current 2.7 percent.

Currently, the upper bracket taxes income above $30,000 for married couples filing jointly at 4.6 percent. Returning to the pre-2012 tax code would raise that rate to 6.25 percent on income between $30,001 and $60,000 and 6.45 percent on income above that.

Full repeal of the 2012 tax cuts would also restore a number of tax deductions that were either repealed or reduced under Brownback’s tax plan, but it would also lower the standard deduction for tax filers.

The House proposal did not call for lowering the sales tax rate from its current 6.5 percent. Lawmakers raised the sales tax rate, from 6.15 percent, in 2015 to make up for some of the revenue that had been lost from the earlier income tax cuts.

The tax conference committee plans to meet again Tuesday. At that time, Senate negotiators could either agree to send the full repeal to one chamber or the other, or they could return with a counter-offer.