February 22, 2024

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Senate Torpedoes Flat Tax Proposal

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Senators torpedoed a flat tax bill that would have created one, 4.6 percent income tax rate. Members of the Senate debated the merits of the proposal for a few hours, before moving it to final action and shooting it down in flames. Only three members of the Senate, President Susan Wagle, Majority Leader Jim Denning, and Sen. Gene Sullentrop, supported the bill.

One day prior, Gov. Sam Brownback announced he would support the legislation if it reached his desk. The bill notably revoked a key component of Brownback’s tax policy, an LLC tax incentive.

Republicans called it a tax increase. The proposal increased taxes for those in the bottom tax bracket from 2.7 percent to 4.6 percent. However, it increased the standard deductions and lowered the sales tax rate on food.

“This is going to be a large tax increase on everybody. Businesses. Everybody,” Sen. Rob Olson, an Olathe Republican, said.

Democrats said the bill wouldn’t go far enough. The state faces a budget gap of about $1 billion between now and 2019. The proposal would increase state revenues by about $295 million in the first year.

Sen. Minority Leader Anthony Hensley, D-Topeka, said the proposal is the fifth tax policy the Senate has considered this session. He said a Senate leadership plan, that included a series of spending cuts and tax increases, didn’t receive a single vote. The Governor’s original tax plan received one vote, but a House plan that would have retroactively increased taxes across the board received 22 votes. Brownback vetoed that proposal, and Senators didn’t have enough votes to override the Governor’s pen.

“It is still my hope that before we end, perhaps not the regular session, but before we leave town from the wrap-up session, we will have the necessary 27 votes if necessary to override the Governor’s veto on a tax plan that goes much further than what we have here today,” Hensley said.

Sales Tax on Food

Members of both parties worried the measure would increase taxes on the lowest income earners. Sen. Mary Pilcher-Cook offered an amendment to eliminate all sales tax on food.

Sen. Steve Fitzgerald, a Leavenworth Republican, called eliminating sales tax on food a philosophical concern.

“I don’t think this vote is about numbers,” Sen. Steve Fitzgerald, a Leavenworth Republican, said. “Everybody knows we’re going to raise taxes and everybody knows we’re going to get the money. This isn’t a math problem…It’s simply a philosophical point we ought to take and get our money elsewhere.”

A coalition of conservatives and some Democrats supported eliminating the food sales tax entirely, but the amendment failed.

When it became apparent the legislation would fail, Sen. Larry Alley attempted to send the bill back to committee, where it could be reworked. Sen. Caryn Tyson supported the effort.

“After listening to the debate and hearing where everyone is at, let’s discuss it more,” Tyson, a Parker Republican, said. However, that proposal failed, and Senators fast tracked a final vote on the legislation instead.

Following the bill’s demise, Brownback’s office issued a statement saying he looks appreciated the Senate’s work on the flat tax proposal and looks forward to working with the legislature on taxes and other issues.

Hensley said he didn’t think the Senate should be following the Governor’s advice on taxes, but Sen. Ty Masterson, an Andover Republican, said the Governor moved in the Senate’s direction.

“It appeared to me that (Brownback) was coming our way,” Masterson said. “This tax plan closes the small business exemption. That’s a huge departure from where he’s been, but he gets called a hypocrite for trying to negotiate, for trying to come a step closer to finding a solution.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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