Mortgage deduction, 'too big to fail,' schools
Published on -2/27/2013, 10:01 AM
The Senate Taxation Committee has approved an amended version of the governor's tax plan proposal. Like the governor's plan, the Senate committee's bill eliminates the state mortgage interest deduction. While no tax plan has yet been acted on in the House, and several different plans are being considered by the House Tax Committee, concern continues to grow over the possible elimination of this deduction, and it is important to view it in the perspective of broader tax reform.
Resulting from the tax bill signed last year, the current law for tax year 2013 doubles the standard deduction from $4,500 to $9,000 for single head-of-household filers and increases by 50 percent the deduction for married couples filing jointly from $6,000 to $9,000. Currently, more than 70 percent of Kansans use the standard deduction when filing and will not be impacted by the elimination of itemized deductions, such as the mortgage interest deduction.
It is also important to note elimination of the mortgage interest deduction at the state level does not impact the federal mortgage interest deduction, which is much larger and would remain available to Kansans eligible to itemize. Furthermore, the value of itemized deductions at the state level is greatly reduced by the value of large reductions in overall tax rates and significant increases in standard deductions.
Attorney General Derek Schmidt has announced that Kansas has signed onto a multistate lawsuit challenging a key provision of the Dodd-Frank Wall Street reform and Consumer Protection Act. Kansas joined 10 other states on the lawsuit pending before the U.S. District Court of the District of Columbia.
The Dodd-Frank law gives the secretary of the Treasury the ability to order the liquidation of financial institutions deemed "too big to fail." Attorney General Schmidt noted such authority undermines the property rights of shareholders of any such institutions, including holdings of the Kansas Public Employees Retirement System. This is not to mention the fact such action by the Treasury would leave the Kansas taxpayer responsible for the tab.
Attorney General Schmidt also observed the new power granted to the Treasury allows the federal government to pick winners and losers among investors in large institutions. This is done while circumventing state bankruptcy laws and, consequently, without any meaningful court supervision.
There has been much discussion during the campaign season and the early days of the 2013 legislative session regarding the proposals for the funding of our Kansas schools. One of the items that has precipitated an array of drafted legislation was the Gannon decision handed down Jan. 11. Since the court rendered its decision that the state of Kansas was not appropriately funding our schools, we have seen legislation to include a change in judicial selection and changing the wording of the Kansas Constitution. The state of Kansas has appealed the Gannon decision, so we will have to see what the courts decide.
The funding of our schools is imperative for the state of Kansas. There have been two bills that have originated from both chambers of the Kansas Legislature. The Senate bill, SB 173, states that in any lawsuit claiming that state funding for education is not adequate, the courts would need to factor the amount spent on retirement benefits when calculating the total state aid to school districts.
In the House, HB 2297, the legislation would require the courts accept the amount spent on education, including the amount spent on retirement benefits, as adequate as long as that amount appropriated for education is more than 50 percent of the state general fund.
The House Education Committee has been working on HB 2003, which would determine the amount of funding for special education and related services. Currently, this bill is still in the House Education Committee.
Last week, the Federal and State Affairs committee heard testimony on House Bill 2199. This bill, known as the Second Amendment Protection Act, concerns the manufacture and ownership of personal firearms solely within the state of Kansas. The proponents of the bill, which include Secretary Kris Kobach and the Kansas Rifle Association, stated this bill would protect our personal and state freedoms under the Second and 10th amendments. This bill applies to those firearms manufactured, owned and possessed within the boundaries of the state of Kansas. I co-sponsored this legislation.
The legislature is nearing the legislative deadline known as turnaround, the process where the bills debated and passed from their chamber of origin then go to the other chamber for possible passage. According to the modified legislative calendar, turnaround day will be Friday. The House of Representatives will be on the chamber's floor all day on today and Thursday to pass legislation by this deadline so bills then can be deliberated by the Senate.
Troy Waymaster, R-Luray, represents the 109th District. email@example.com