Kansas lawmakers wasted no time getting down to business on the first day of the 2017 legislative session. House tax committee members met and introduced their first tax proposal Monday afternoon.
The bill would repeal an income tax exemption for more than 300,000 Kansas businesses to help balance the state budget in the face of a deficit. Republican Steven Johnson, the committee’s chairman, said they’ll also be considering other ideas.
“We introduced the first bill just for the purpose of having a vehicle, more than anything. What I am quite confident of is that whatever bill passes will not look like that bill, but it gives us a way to get started,” Johnson said.
Republican Rep. Ken Corbet said businesses lost some of their tax deductions in recent years, so reinstating the incomes taxes would hit them especially hard.
“I think everybody’s tired of paying taxes,” Corbet said. “I campaigned just like everybody else and no one, when I went door-to-door and farm-to-farm, said, ‘Ken, I’ll guarantee my vote for you if you’ll raise my taxes.’” The legislation would also make the change retroactive back to the first of this year. Republican Rep. Erin Davis says if they do that, they’ll need to do it fast. She said businesses tell her that retroactive changes make it tough to plan.
“I think that’s a fair argument and if we’re going to be putting them back on the tax rolls we need to do that as quickly as possible so that they can make a plan for their year,” Davis said.
Democratic Rep. Tom Sawyer said they have made tax bills retroactive in the past. Plus, he said this is a change that was debated heavily in the latest campaign season.
“There are a lot of people out there expecting this to happen, so it’s not like this will be a total surprise to them,” Sawyer said.
The business income tax exemption has been one of the more controversial parts of the income tax cuts pushed by Republican Gov. Sam Brownback. His administration says the tax policies have been spurring businesses and job growth.
Brownback will begin laying out his proposals during the State of the State Address Tuesday. He hasn't given many hints beyond saying he'll use multiple strategies.
“We’ll do a mixture of both cuts and revenues. The size of the hole that we’re looking at, I think, is one where you’re just going to have to do some mixture," Brownback said in an interview in December. "And none of it’s going to be something that people are going to be particularly excited about. At the end of the day, you've got to come up with a balanced budget, and we will.”
Senate President Susan Wagle said her chamber is ready to make cuts to help balance the budget, according to the Associated Press.
"Kansans must balance their budgets and live within their means. They rightfully expect the same of their elected officials," Wagle said. "We're ready to find permanent solutions to these challenges."
Others, like Democrat Rep. John Alcala, say it’s time to reevaluate the state's tax policies.
“To make sure that everyone’s paying their fair share and there’s no imbalance,” Alcala said.
