TOPEKA — Kansas House Speaker Ron Ryckman echoed Tuesday the no-tax-hike mantra of Democratic Gov.-elect Laura Kelly.
“Candidate Kelly talked about how she didn’t want to raise taxes. Obviously, Republicans don’t want to raise taxes. If we don’t do anything by April 15, our taxes will be raised,” said Ryckman, an Olathe Republican.
This tax issue, considered by the 2018 Legislature but punted to the session starting Monday, centers on a windfall to the state treasury of more than $100 million resulting from changes to the federal tax code.
One option for funneling the windfall to Kansans would be to guarantee taxpayers the right to itemize deductions on their 2018 state returns even if they didn’t on their federal returns. Lawmakers also have suggested reducing the state’s standard income tax deduction or allowing a higher deduction on state taxes for mortgage interest and medical bills.
Indeed, Kelly did tell Kansas voters she wasn’t interested in boosting state taxes and pledged to make budget stability a top priority as governor. She said the goal was to avoid state budget turmoil created by 2012 state income tax reductions that contributed to years of revenue shortfalls. Those tax cuts, driven by supply-side economic sentiment, were mostly repealed by the Legislature in 2017.
Kelly, who spent 14 years in the Senate representing Topeka, hasn’t embraced GOP demands for a robust tax cut bill. She is wary of burning through a budget cushion projected to be about $900 million by the end of the fiscal year. She said demands for investment in transportation, social services, pensions, education and health care could quickly chew through reserves.
“As I said during the campaign,” Kelly said, “we will first stabilize the budget before we make any changes to the tax code. We need to let the dust settle on all of the tax changes that have been made in the past few years, both at the state and federal level.”
She said leveling out highs and lows of the government’s revenue stream would eventually allow the state to moderate the 6.5 percent sales tax on food. When local sales taxes are added in, the total has topped 10 percent in some cities in Kansas. It is an unusually high rate that makes Kansas an outlier on taxation of essential goods.
Dropping the state’s sales tax on food to 4 percent would lighten state revenue by about $125 million annually. It also would deposit at least $100 into the pocket of an average Kansan.
“That will be an actual shot of adrenaline to our communities,” said Rep. Tim Hodge, D-North Newton.
Eric Stafford, a lobbyist with the Kansas Chamber, said the business organization would urge the 2019 Legislature to return the federal windfall and preserve tax incentives designed to drive job growth.
He said the Kansas Chamber also would support implementation of a sales tax on out-of-state internet companies that have a competitive advantage over bricks-and-mortar Main Street businesses in Kansas.