With Kansas on track for billions in surplus, Republicans promise to deliver tax cuts

Republicans in the Legislature spoke against one-time rebates, a measure proposed by Gov. Laura Kelly in the last legislative session

By: - November 14, 2023 12:43 pm
Senate President Ty Masterson and Speaker of the House Dan Hawkins say they are firmly against Medicaid expansion. (Rachel Mipro/Kansas Reflector)

Senate President Ty Masterson and Speaker of the House Dan Hawkins called Gov. Laura Kelly's alternative to their flat tax proposal a "one-time gimmick." (Rachel Mipro/Kansas Reflector)

TOPEKA — New revenue estimates show the state is projected to have more than $2 billion by the end of the current fiscal year. Top Republicans in the Legislature are using the estimates to revitalize their push for wide-ranging tax cuts.

Speaker of the House Dan Hawkins and Senate President Ty Masterson released a joint statement Tuesday alongside Majority Leader Chris Croft, R-Overland, Speaker Pro Tempore Blake Carpenter, R-Derby and chairman of the House Committee on Taxation Rep. Adam Smith, R-Weskan.

“The state continues to bring in a lot more money than it needs and it’s past time for this hard-earned taxpayer money to go back to Kansans in the form of long-term, actual tax relief that folks can rely on long into their futures,” the statement read. “House budget and taxation committees have been working tirelessly to craft a beneficial, long-term tax relief plan that also places significant priority on the long-term well-being of state finances and that’s exactly what Republicans will deliver next year.”

The latest revenue estimates were released during a Nov. 9 meeting conducted by Kansas Legislative Research Department Director J.G. Scott along with governor budget director Adam Proffitt. The two gave an overview of the state’s finances ahead of the 2024 Legislative session.

“Overall, the state’s economy and receipts, they really remained pretty steady,” Scott said. “But there could be some headwinds that throw everything off track. Inflation is continuing to cool, which is good news.”

By the end of fiscal year 2024, which started July 1, the state is set to have a balance of a little more than $2.8 billion, along with $1.7 billion in the rainy day fund. Analysts arrived at the number from an estimated $12.7 billion in revenue and $9.9 billion in state general fund expenses.

Fiscal year 2025 is projected to have an ending balance of $3.5 billion with $1.7 billion in the rainy day fund. Estimated revenue in the general fund is calculated to be slightly over $13 billion and expenses are around an estimated $9.6 billion.

During the Nov. 9 meeting, Proffitt warned that these numbers are not set in stone.

“This profile you’re looking at is but a point in time,” Proffitt said. “It is static, it is a snapshot of what we think today. We’ll continue to revise our forecast. … It’s really looking across the horizon and making sure that we maintain structural balance so that we don’t find ourselves in a bind down the road.”

The state uses this consensus revenue estimate, revised in April and October, to determine the state’s budget and allocate funding. Democratic Gov. Laura Kelly and the Kansas Legislature will begin workshopping the new state budget in January.

Legislative Republicans have already announced their intent to bring back a massive flat tax proposal panned for disproportionately benefiting the wealthiest Kansans.

Kelly vetoed last year’s proposal, known as Senate Bill 169, and Republican efforts to override the veto fell short by just one vote in the Senate. The final version of the bill would have set a 5.15% income tax rate for all Kansans, decreasing revenue by an estimated $330 million each year.

In the first version of the bill, the top 20% of Kansas wage earners would have received about 70% of the total $764 million tax cut. 

The final version would have offered more than $250 per month in savings to Kansans who earn more than $250,000 per year. Individuals who earn between $25,000 and $75,000 would have received about $5 to $8 per month in tax relief.

When she shot down the flat tax, Kelly proposed a one-time tax rebate of $450 per person, or $900 for married couples.

Republicans on Tuesday called the proposal a “one-time gimmick.”

“Kansans can’t pay their bills due to inflation,” their statement read. “‘Free government stimulus money is exactly what caused this inflation in the first place so Governor Kelly might need a lesson in basic economics — long-term tax relief will help Kansas families and the Kansas economy more than a one-time gimmick.” 

In response to the Republican announcement, Brianna Johnson, spokeswoman for the governor, said Kelly would continue to fight for commonsense tax measures. 

“There’s no question: we need to give this money back to Kansans through responsible tax cuts,” Johnson said. “That’s exactly why Governor Kelly tried to give each Kansan a $450 rebate that would have gone out this past summer, and it’s why last legislative session she proposed cutting property and retirement taxes. She will once again work with the Legislature to cut taxes in a way that does not risk the financial future of our state or our strong public schools and roads.”

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Rachel Mipro
Rachel Mipro

A graduate of Louisiana State University, Rachel Mipro has covered state government in Baton Rouge and New Orleans. She and her fellow team of journalists were 2022 Goldsmith Prize Semi-Finalists for their work featuring the rise of the KKK in northern Louisiana, following racially-motivated shootings in 1960. With her move to the Midwest, Rachel is now turning her focus toward issues within Kansas public policies.