Kansas' budget woes may have gotten worse because of federal tax cuts, according to a new report. Part of the federal tax-cut deal in December was a provision allowing businesses to deduct the full value of new equipment purchases from their taxes through 2011. Because Kansas' income tax is linked to federal tax law, the tax change could result in Kansas losing $198 million in tax revenue during the current and next two fiscal years, according to the Center on Budget and Policy Priorities. Kansas could avoid this loss by "decoupling" its tax code from this federal provision — though state lawmakers have resisted making such adjustments in the past.
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