Gov. Laura Kelly Says She Will Veto a Joint Tax Reform Bill That Would Cost $2.3 Billion Over Five Years

Gov. Laura Kelly Says She Will Veto a Joint Tax Reform Bill That Would Cost $2.3 Billion Over Five Years

TOPEKA — Gov. Laura Kelly said there was “absolutely no way” she could not veto the $2.3 billion tax cut bill that was passed by the Kansas Legislature with support from both parties. She said that a drop in income of $500 million per year would destroy the state’s finances.

Kelly said that discussions about big tax reform would start up again at the statehouse after she called a special session of the Legislature to look at a different plan. In an interview with Steve Kraske on KCUR’s “Up To Date” news show, she said she would put together a new tax plan for House and Senate members to look over.

“Right from the start, I made it clear that I would veto any bill that would put Kansas’s finances at risk.” The bill that was passed by the legislature would do just that, the Democratic governor said. „There is no way in hell that I would sign it. To pass a good tax cut bill, I’ll call the Legislature back for a special

Kelly said that the many tax-cutting bills passed by the 2024 Legislature would cause the state government to have money problems in a few years, even though the government currently has a huge income surplus. She said that the yearly loss of more than $500 million caused by those bills could not be sustained. She said it could cause budget problems like the ones that happened under Gov. Sam Brownback’s watch, when he rapidly cut the state income tax without cutting spending. That put the state in a financial mess.

Kelly told KCUR, “We do have enough money to do a very strong tax cut, just not as much as the Legislature proposed.” “There is no way in hell that I would sign a bill that I believe will return us to the days of four-day school weeks, crumbling roads and bridges, and a foster care system that didn’t work at all. That’s not possible for me. I told the people of Kansas that I would make things better. I broke them, and I’m not going to do it again.

A veto of Senate Bill 37 was tricky from a political point of view, since it had already been passed by the House (108–11) and the Senate (25–9). Republicans and Democrats have both asked her to sign it into law.

Instead of Jan. 1, 2025, the bill in question would get rid of the state’s 2% sales tax on groceries on July 1, 2024. In the 2024 tax year, it would get rid of the state income tax on Social Security payments.

The bill would raise the amount of property tax breaks linked to the statewide school finance fee from $70,000 to $100,000. That is a big rise from the $42,000 exemption that is now in place. 20 mills of property tax would be cut to 19.5 mills to pay for schools.

The top income tax rate in the state would go down from 5.7% to 5.57%, and the standard deduction and personal exemption would go up. The state’s income tax rate would go down from 5.25 percent to 5.2 percent.

Kelly told KCUR that her biggest worry was that bills backed by the Legislature would cut income taxes too much, which would cost too much.

People who voted for the tax bill, both Republicans and Democrats, begged Kelly to give in. In the August primary and the November general election, all 125 House seats and all 40 Senate seats would be up for grabs. This made their plea even more important. A short special session wouldn’t have much of an effect on those campaigns, but a long fight over tax policy could make it harder to raise money and run for office.

That’s what Topeka Republican Sen. Brenda Dietrich said about her votes this session: “I have voted for many income tax reduction bills.” She also voted for SB 37. “I was hoping this wouldn’t be vetoed and that Kansas residents would get tax breaks as soon as possible.”

In mid-April, Kansas’s tax income forecasters said that the state could end the current fiscal year on June 30 with a surplus of $2.6 billion in the general fund and $1.7 billion in a special fund for emergencies. The prediction said that the state could end the next fiscal year with a $1.9 billion general fund surplus and $1.8 billion in the emergency account, even if state tax income dropped by $530 million.

House Majority Leader Chris Croft, a Republican from Overland Park who backed SB 37, said that the governor had no good reason to cancel the bill because the state was expected to have a surplus.

Crowds were told that Croft’s plan for tax relief would mean that everyone in Kansas, no matter how much money they make, would get a tax cut. There is only one name left between you and tax relief.

The state government could handle the tax changes in SB 37, according to Rep. Jason Probst, D-Hutchinson. He was one of the people in the House who voted for the bill.

“From what I’ve seen, we don’t get many chances to give real money to real people before the big names come in to get it,” Probst said. “I’m really afraid that if we miss this chance, most of the tax cuts will go to people who don’t need them again.”

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