Senate tax bill sent to conference committee

The Kansas House on Thursday declined to go along with a Senate-passed tax bill that would cut state income taxes for most people, with Republican leaders saying there is still too little information available about what it would do to state revenues and the budget.

The Senate Substitute for House Bill 2228 is intended to prevent the state from reaping an unintended windfall that could result from recent changes in the federal tax code.

One of the major changes it makes to the state code would be to allow people to itemize deductions on their state returns, even if they are not able to itemize on their federal returns.

But the Senate added a number of additional provisions authorizing various kinds of tax credits and increasing the amount people can deduct on their state returns for things such as medical expenses and mortgage interest payments.

Perhaps most significant, though, would be a 25 percent increase in the state’s standard deduction, which would amount to an across-the-board tax cut for people who do not itemize.

“We agree that we have an interest in returning the windfall from the federal tax changes, and there is one element that does that, on itemized deductions,” Rep. Steven Johnson, R-Assaria, who chairs the House Taxation Committee, said on the House floor Thursday.

Although no official estimates have yet been made about how much revenue the state would forego by changing the rules on itemized deductions, Johnson said the other portions of the bill would cost the state at least $140 million a year in revenue.

The conference committee met briefly late Thursday afternoon, and it quickly became apparent how far apart the two chambers are.

Johnson started the meeting by saying the House was not even prepared to make an initial offer until there is an estimate of how much the change in itemized deductions would cost the state, something he conceded would require a detailed analysis of all of this year’s individual tax returns. He also said that at present, the House is not prepared to accept an increase in the state standard deduction.

But Sen. Caryn Tyson, R-Parker, who chairs the Senate tax committee, said the Senate has a “strong position” in favor of the majority of the bill’s contents, and she was not prepared to make a counteroffer.

Lawmakers have scheduled only nine days for the wrap-up session, with the final “sine die” adjournment set for next Friday, May 4.