Kansas Gov. Laura Kelly vetoes Republican tax plan, setting stage for override effort
Kansas Democratic Gov. Laura Kelly on Friday vetoed a Republican-led plan that would have imposed one income tax rate on all taxpayers, an idea the governor has opposed as a reckless experiment.
But Kelly warned she will call a special session if lawmakers don’t approve tax cuts she finds acceptable before adjourning this spring.
“While I urge the legislature to take this irresponsible flat tax experiment off the table once and for all, know that I will not let legislators leave Topeka this year without meaningfully and responsibly cutting taxes for middle-class families,” Kelly said in a statement.
Top Republican lawmakers will now search for the two-thirds majorities necessary in the House and Senate to override the veto. The legislation passed both chambers earlier this month without veto-proof majorities.
“House Republicans will remain focused on delivering tax relief to the people of Kansas by overriding the Governor’s veto,” House Speaker Dan Hawkins, a Wichita Republican, said in a statement.
He lambasted Kelly for “choosing political wins over increasing Kansan’s paychecks.”
The GOP-led bill, which would cost over $1.6 billion over three years according to legislative researchers, would tax any income above $6,150 for individuals and $12,300 for married couples at 5.25%, while increasing personal exemption on taxes and linking it and the standard deduction to inflation.
Kansas law currently includes three income tax brackets, set at 3.1%, 5.25% and 5.7%.
The measure also includes several elements Kelly included in her tax package — the elimination of the food sales tax on April 1, the elimination of income tax on Social Security and a $100,000 exemption on state property taxes.
According to an analysis from Kelly’s budget department, the bill would have resulted in a more than $500 million budget shortfall by 2029, though Republicans have said the estimates assume more government spending than they would approve.
Kelly said legislative leaders should instead consider the plan she released at the beginning of the session alongside two Republican senators and a conservative independent. The Kelly administration has said her plan wouldn’t cause a shortfall in the next five years.
Supporters of the Republican plan cast it as a tax cut for all Kansans, leaning on expanded income tax exemptions that would eliminate income tax entirely for some of the state’s lowest earners. They’ve framed the bill as a compromise because it shares several components of Kelly’ plan.
“We’ve come so far to her that it’s time for her to compromise,” Senate President Ty Masterson, an Andover Republican, told reporters earlier this week. “We’re sacrificing the benefit, this tax benefit to the low income just to stand on some structure issue. It’s not worth it.”
An analysis released by the Institute on Taxation and Economic Policy, a progressive Washington-based think tank, on Monday showed the top 1% of earners would see an exponentially larger tax break by dollar amount than Kansas’ middle and low earners. It estimated Charles Koch — who funds the bill’s most vocal proponent, Americans for Prosperity — would see an $875,000 annual tax break.
Masterson and Hawkins have said repeatedly a flat income tax is a must-have in any tax plan they support even as Kelly has vowed to oppose that policy in all forms.
Last week Masterson said he was willing to finish the session without tax cuts if Kelly wouldn’t come to the table on a flat tax. The threat of a special session could change those dynamics in an election year when lawmakers are eager to leave Topeka and begin fundraising.
This story was originally published January 26, 2024 at 2:04 PM with the headline "Kansas Gov. Laura Kelly vetoes Republican tax plan, setting stage for override effort."
