House and Senate may debate taxes within coming days

House and Senate leaders want to debate a tax plan soon, lawmakers and legislative aides said Tuesday.

The Legislature is set to start a weeks-long break early next month, driving the desire to consider a new tax plan before then.

The House Tax Committee plans to vote Wednesday on a bill to tax personal income at a single rate, also called a flat tax. The chairman of the committee indicated House leadership wants to consider the bill within the next few days.

“I think that there is a desire to see if we can put something together that is simpler and still addresses the change that people want,” Rep. Steven Johnson, R-Assaria, said.

A spokesman for House Speaker Ron Ryckman, R-Olathe, couldn’t be reached for comment late Tuesday afternoon.

The working plan in the Senate is to debate whatever tax bills come out of the Senate Tax Committee, said a spokeswoman for Senate President Susan Wagle, R-Wichita.

Senate Majority Leader Jim Denning, R-Overland Park, said he wants to see a debate take place.

“My personal opinion is I would love to run a tax plan of some type before first adjournment on the Senate floor to see where everybody’s landing,” Denning said.

With one exception, the House and Senate haven’t attempted to pass a tax plan since the Legislature approved House Bill 2178, which would have raised personal income tax rates, reinstated a third tax bracket and eliminated a tax exemption for non-wage business income.

Gov. Sam Brownback vetoed that bill. An effort to override the veto succeeded in the House but fell three votes short in the Senate.

Since then, the Senate has voted down Brownback’s tax proposal – an action some interpreted as intended to make a symbolic point about support for the governor’s ideas.

Brownback’s office has signaled a willingness to consider a flat tax plan. A spokeswoman has said the governor is open to ideas to make the tax code “fairer, flatter and simpler.”

The flat tax plan in the House Tax Committee would tax personal income at a rate of 5 percent. Kansas now has two rates – 2.7 percent and 4.6 percent. The second rate applies to individuals earning more than $15,000 or married couples earning more than $30,000.

Under the plan:

▪ Joint married filers with a taxable income of $12,500 or less and individuals with taxable income of $5,000 or less would continue to be exempt from income taxes.

▪ Pass-through business income, which is now exempt, would be taxed again. Supporters hail the exemption as a policy that supports small businesses and critics say it is unfair.

▪ The sales tax rate on food would drop to 5 percent beginning in 2019. Kansas now taxes food at the same rate as any other item.

The bill would generate about $870 million over two fiscal years. The state faces a revenue shortfall of about $1 billion through June 2019.

“I think it’s just unfair,” Rep. Tom Sawyer, D-Wichita, said of the proposal.

The bill would hit low-income individuals the hardest, he said.

Rep. Erin Davis, R-Olathe, said she wants to support the bill but needs time to examine it. She offered an amendment to reduce the rate to 4.9 percent – a level that has been discussed by conservative lawmakers. The committee rejected the amendment.

“I’ve never made any bones about the fact that we were going to have to raise taxes when we got back here this year – we all knew that was coming. However, the amount of money we raise on income tax I would like to keep at a minimum,” Davis said.

Revenue Secretary Sam Williams attended the committee meeting Tuesday but would not comment on the bill.

This story was originally published March 28, 2017 at 6:45 PM with the headline "House and Senate may debate taxes within coming days."