By JOHN HANNA
TOPEKA, Kan. (AP) — With surplus state revenues rolling in each month, the Republican-controlled Kansas Legislature is poised to slash taxes again only a decade after a GOP governor launched a tax-cutting experiment that became nationally notorious for the budget shortfalls that followed.
And this time Democrats aren’t warning that big tax cuts will tank the budget, endangering funding for schools or social services. Instead, they’re arguing about how taxes should be cut, favoring proposals from Democratic Gov. Laura Kelly to lower the cost of groceries and give a $250 rebate to Kansas residents who filed state income tax returns last year.
Legislators could cut taxes by nearly $1.5 billion over the next three years, starting in July. Before they began their annual spring break last week, lawmakers approved about $310 million worth of cuts over three years. When lawmakers reconvene April 25 to wrap up business for the year, two bills with other, larger cuts await final votes.
Kelly still invokes voters’ memories of the past GOP tax-cutting experiment in running for reelection this year, but she and fellow Democrats also argue that Kansas has plenty of surplus cash to afford her big proposals. In resisting them, Republican lawmakers sometimes play the same card Kelly has.
“I wanted to be a little bit moderate on the amount of tax cuts that we did impose,” western Kansas Republican state Rep. Adam Smith, chair of the House tax committee, said Monday in an interview. “I don’t want to be back here in five or six years trying to raise taxes because we went and enacted too many permanent tax cuts that we couldn’t sustain.”
When legislators opened their annual session in January, their research staff told them Kansas was on track to end June 2023 with a record $3.8 billion in cash reserves. The state has since kept collecting more taxes than it anticipated — it’s had surpluses for 20 consecutive months — and lawmakers in both parties are frustrated that bigger tax bills didn’t pass earlier.
“We are not making a priority to pass this tax money back to the Kansas taxpayers,” Senate tax committee Chair Caryn Tyson, a conservative southeast Kansas Republican, said in a speech before lawmakers adjourned.
The state’s strong run of better-than-expected monthly tax collections began immediately after bipartisan majorities in the Legislature reversed most of the Republican tax cutting experiment begun in 2012 under then-GOP Gov. Sam Brownback. In the nearly five years since, the state has failed to hit its tax-collection projections only three times.
Kelly’s first television ad of her reelection campaign, which started broadcasting over the weekend, briefly features a photo of Brownback. The 30-second spot recalls the GOP’s “reckless tax experiment” from his administration before adding, “so Kansans voted for change” in electing Kelly in 2018.
Yet Kelly also keeps stumping for ending the state’s 6.5% sales tax on groceries, saving taxpayers $1.4 billion on their grocery bills over the next three years. In announcing another good month for tax collections in March — a 13.4% surplus or $80 million in collections — Kelly said the numbers demonstrated that Kansas could get rid of the tax.
Kelly’s likely GOP opponent in November, Attorney General Derek Schmidt, also called for reducing or eliminating the tax as well. One of the two bills still awaiting final votes would phase out the tax over three years. Democrats are annoyed that it wouldn’t happen by this fall.
“So we don’t have the money? Now, come on, guys,” state Rep. Jim Gartner, of Topeka, the top Democrat on the House tax committee, said during an interview.
Republicans largely have ignored Kelly’s proposal for a $250 income tax rebate, a one-time break worth $460 million. Some have argued that it is a political gimmick, while Smith says it’s better to do something “in perpetuity” for taxpayers.
Republicans have pursued two dozen other smaller tax income, sales and property tax proposals, split between the bill already on its way to Kelly’s desk and one of the two measures still awaiting final votes.
“To me, it’s all about just kind of ripping the Band-Aid off. Do you do it all at once or do you just kind of slowly pull it off?” Smith said. “Normally I’m a the kind of guy who wants to just rip that sucker off of there, but you know, if you do that, and you’re not all the way healed up, it kind of creates more problems, so I’m wanting to make sure that we do it in a fiscally responsible way.”
Democrats scoff at such comments, believing Republicans simply want to deny Kelly a big policy victory heading into November election.
“It’s all politics,” Gartner said.