There were two big stories in the Kansas House this past week. I had the simultaneously daunting task and welcomed challenge to carry Senate Bill 22, and essentially lead the debate in the House. All totalled, the debate lasted about 2.5 hours.
Senate Bill 22
When Congress made changes to the federal tax code last year, it triggered the need for states – like Kansas – to take action so that families in our state wouldn’t be penalized. SB 22 would update the Kansas tax code so that middle-income Kansans can continue to write-off their medical expenses, property taxes, charitable contributions and mortgage interest, even if they aren’t able to itemize on their federal taxes.
For global employers with a Kansas footprint:
Clarifies language in the Kansas tax code so that changes in the federal tax code do not trigger unintended tax hikes at the state level for business owners. Right now, Kansas companies that do business outside of the United States pay taxes on those profits at the federal level. Those profits are not taxed at the state level and never have been. Without this bill, these Kansas companies would be subjected to additional taxes at the state level, making Kansas a more expensive, and less competitive, state for businesses to operate in.
For Main Street businesses:
Eliminates an unfair playing field that makes it cheaper for out of state businesses to sell to Kansas customers because they don’t have to collect sales taxes like Kansas businesses do. Removes liability from individual Kansans to track, record, and report out of state purchases and places that liability on the out of state merchant where it belongs. Stops giving out state businesses an upper hand so that our local brick and mortar store owners can compete more fairly.
For every Kansan who buys groceries:
Lowers the sales tax from 6.5 percent to 5.5 percent on certain foods and food ingredients. Supplemental Nutrition Assistance Program guidelines will determine which foods will be eligible.
This isn’t just a Kansas issue. Many states across the country have had to change their tax codes in the wake of the federal changes. Red states like Texas and North Carolina but also blue states like New York, New Jersey, Pennsylvania and Connecticut have all realized that the right thing to do is to change their laws so taxpayers aren’t penalized because of changes in Federal tax policy. SB 22 passed the House, on Friday, March 8th, 76-43.
School Finance—the Number is Not Enough
On February 28, the story broke that Schools for Fair Funding had submitted corrected testimony to the Senate Select Committee on Education Finance. The SFFF had originally testified at the February 6th hearing on SB 44 that the group would drop its lawsuit against the state if the Legislature approved the Governor’s proposed school finance changes. They have now backed away from the Governor’s recommendation, claiming a “mathematical error” at the Kansas Department of Education...who disputes that. Accordingly, they advocate Kansas’ spending to be more than $900 million higher than it was in 2017-18. Undoubtedly, more on this later.