Budget Proposal Includes Tax Cut Flatline

By John Celock

Kansas’ Republican governor has proposed a budget that includes a flattening of the state’s income tax cuts and a new block grant for school financing.

In a presentation to legislative budget committee members Friday morning, state Budget Director Shawn Sullivan said that Gov. Sam Brownback’s (R) budget proposal calls for the state’s income tax cuts to flatline starting in 2016, along with a raise in the state’s consumption taxes. Brownback is also proposing spending cuts in departments to help plug a multi-million budget hole.

Under Brownback’s plan the state’s income tax rates will be 2.7 percent and 4.6 percent in 2015 with a drop to 2.66 percent and 4.6 percent in 2016 .The rate would then remain the same heading through 2018 under the terms outlined by Sullivan. The plan in effect freezes the income tax cuts that Brownback and the Legislature passed in 2012 and is similar to a tax plan that former state House Minority Leader Paul Davis pushed in his unsuccessful campaign against Brownback last year.

The budget proposal came a day after the governor used his State of the State address to say, “we will continue our march to zero income tax.” It is unclear how much support Brownback can gather amongst Republican lawmakers for the tax plan freeze. GOP lawmakers in the House bucked Brownback in 2013 over a sales tax hike that Brownback proposed to cover the costs of the income tax cuts.

In the area of consumption taxes, Brownback is proposing to raise the per pack tax on cigarettes from 79 cents to $2.29 a pack and the whole tax rate from 10 percent of the wholesale price to 25 percent. Brownback also proposes raising the liquor enforcement tax from eight percent to 12 percent.

Brownback used the budget to propose acceleration of his itemized income tax deduction plan and for a tax amnesty program for delinquent taxes. The plan says that delinquent taxes paid during a six-week window later this year would bring in $30 million to the state.

Brownback used the budget proposal to outline his proposed temporary change to the state’s school financing program. During the State of the State Address, Brownback proposed canceling the current formula and moving to a state block grant that would be allocated for the next two years. He said that during this period, lawmakers can draft a new school financing formula.

Among the areas Brownback said will be covered in the block grant will be state funds for general state aid, supplemental state aid and capital outlay aid for school districts.

Brownback also used the proposal to call for increased state employee contributions to the pension system and for transferring $150.7 million out of the state highway fund this year and $100 million in 2016 and 2017 to the state general fund. He said the state Department of Transportation has said all existing construction can continue under this plan.


Categories