For the last two years, the tax debate has been whether or not to put the LLC’s and others back on the tax rolls. This year’s debate is not about whether or not we will repeal the LLC loophole that will happen; it is about whether we raise the rates on the other taxpayers. Voting for taxes was not taken lightly or without much consideration. I personally agonized over whether-or-not to raise taxes. The state of Kansas is more than $300 million short this year, and we do not have the money to pay our bills.

At this point, we are selling off our assets to pay the bills, have transferred millions from KDOT, our debt is skyrocketing and our credit rating is falling. There are areas where the state can do a better job with efficiencies, and I continue to push savings through efficiencies. The state has cut the budget nine times since 2011; there are 2,816 fewer people employed by the state, and we have held total spending increases to 1 percent.

Some things we can’t control are the enrollment in our schools, some have increased, or the state’s human services caseload, which has increased by $144 million (7.1 percent) between 2012 and 2016. Every solution requires give and take. While this bill is not perfect, it restores fairness in our tax code. I voted for this structural solution.

On Friday, the Senate debated Sub HB 2178, the tax bill that passed out of the House this week. There was substantial debate on this bill. Some colleagues thought this bill didn’t go far enough to close the current $350 million budget deficit and some thought it taxed too much and cut too little. Sub HB 2178 would close the LLC exemption, and would expand our current two-bracket tax system into a three-bracket system. This bill will be retroactive to Jan. 1, 2017.

Under the new tax proposal, this would be the three-tiered system:

• Low-income wage earners less than $30,000 will not see a change; rate would remain at 2.7 percent.

• Rates for middle-income wage earners $30,001 to $100,000 will change from 4.6 percent to 5.25 percent, a full percentage point lower than the 6.25 percent Kansas paid prior to 2012.

• Rates for high-income wage earners $100,001 and above will change from 4.6 percent to 5.45 percent, a full percentage point lower than the 6.45 percent Kansans paid prior to 2012.

The legislation also would restore a tax deduction for medical expenses. Taxpayers will be able to begin claiming certain non-wage business income losses in conformity with federal treatment. It will eliminate a tax exemption for limited liability companies that more than 330,000 entities currently use. The Kansas Department of Revenue estimates the bill would generate approximately $590 million next year. The state’s budget shortfall is anticipated to exceed $500 million next year. Separate legislation will address the current-year shortfall of about $310 million.

The new tax rates would be 2.7 percent, 5.25 percent and 5.45 percent. Here is a comparison of Married Filing Jointly Tax Rates in our surrounding states:

• Nebraska: $6,120 + 3.51 percent, $36,730 + 5.01 percent, $59,180 + 6.84 percent.

• Colorado: Flat rate 4.63 percent.{div}• Oklahoma: $7,500 + 3.0 percent, $9,800 + 4 percent, $12,200 + 5 percent.{/div}• Missouri: $7,000 + 5 percent, $8,000 + 5.5 percent, $9,000 + 6 percent.

Sub HB 2178 has been passed to Gov. Sam Brownback’s desk. Brownback openly stated he would not sign this bill, although that doesn’t mean it won’t become law. The governor is now presented with three options: He can sign the bill into law, he can let the bill become law without signing it by letting it sit on his desk for 10 days after receiving it, or he can veto the bill within 10 days of receiving it.

If the governor should chooses to veto Sub HB 2178 the bill will go back to the House, where a motion to override the veto would be in order at any time. For the House to override the veto, two-thirds majority or 84 members would have to vote in favor of this bill. If the House overrides the veto, the bill will come back to the Senate and also would require two-thirds majority vote or 27 votes to override the veto. If the governor vetoes the bill and both Chambers vote to override his veto, it will become law. If the vote does not override the veto, we will begin the tax process once again.

Rick Billinger, R-Goodland, represents the 40th District in the Kansas Senate.