TOPEKA, Kan. (AP) - Top Republican lawmakers in Kansas are working on new proposals for raising income taxes to fix the state budget that include a plan similar to one GOP Gov. Sam Brownback vetoed earlier this year.
Brownback told reporters Wednesday that he has given legislators multiple options for raising new revenues but that he still supports moving Kansas to a personal income tax with a single rate for all filers. Kansas currently has separate rates for lower- and upper-income earners, and some legislators would like to add a third rate for the highest earners.
Senate Majority Leader Jim Denning, of Overland Park, said he and fellow GOP senators are working on plans for increasing income taxes that have both two and three rates. Denning said he’s not working on any proposals for a single rate.
Republican legislators slashed personal income taxes in 2012 and 2013 at Brownback’s urging, and budget problems followed. Kansas faces projected budget shortfalls totaling $889 million through June 2019, and lawmakers are considering rolling back past tax cuts. The Republican-controlled Legislature returns Monday from its annual spring break.
Brownback vetoed a bill in February that would have raised more than $1 billion over two years, and it would have returned the state to three tax brackets after the state moved to two tax rates in 2012. Senators rejected a bill earlier this month endorsed by Brownback that would have imposed a single tax rate for all filers to raise $652 million over two years.
“I’ve moved on from the flat tax,” Denning said.
Legislators in both parties expect to eliminate a personal income tax exemption granted in 2012 to more than 330,000 farmers and business owners. Brownback still touted it Wednesday as a pro-growth policy as President Donald Trump’s administration outlined a plan to cut federal income taxes for small business owners.
“That creates jobs,” Brownback told reporters. “I hope we don’t reinstate those taxes.”
But a study released Tuesday by researchers at Indiana University, the University of South Carolina and the U.S. Treasury Department said evidence suggests that the “primary effect” of the Kansas exemption was “tax avoidance” rather than new economic activity.
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