Kansas Democratic governor and Republican leaders strike tax compromise, leaving dissenters on both sides

Kansas Republicans wanted to enact a 'flat' tax rate, but faced with the possibility of a veto from Gov. Kelly, came to a compromise to ensure at least some cuts went through.

Kansas House Taxation Committee Chair Adam Smith watches as the House votes on April 3, 2024, at the Statehouse in Topeka, Kansas. Smith says he is not sure whether he will support a deal on cutting taxes brokered by Democratic Gov. Laura Kelly and Republican legislative leaders. (AP Photo/John Hanna)

Still, the final deal inspired bipartisan grumbling. Kelly's office and GOP leaders worked it out privately instead of three House and three Senate negotiators drafting a plan, with some discussions in public.

House Taxation Committee Chair Adam Smith said before either chamber voted that he didn't know whether he'd support the deal — even though it was his job to explain it to colleagues and he'd normally promote a plan backed by GOP leaders.

"I’m hearing a lot of dissent," said Smith, a western Kansas Republican. "I've got to carry the bill, and it’s bad when I don’t even know if I’m going to vote for it."

Republicans had wanted to cut taxes by between $500 million and $600 million annually or between $1.5 billion and $1.8 billion over three years. The new plan, worth about $430 million annually, is less generous in increasing standard deductions than the Senate's plan, which boosted the one for married couples to $22,000 to help lower-income families.

Some lawmakers also said the new plan doesn't cut property taxes enough amid rising home values and local levies. For the owner of a home at the Kansas median value of $210,000, the annual savings would be about $140.

"This, to me, doesn't cut it," said northeastern Kansas Sen. Tom Holland, who represented Democratic senators in tax negotiations. "There are monster increases every year."

The deal in Kansas came two weeks after Georgia's Republican-controlled Legislature passed personal and corporate income tax cuts that GOP Gov. Brian Kemp favored. Like Georgia, Kansas has a big budget surplus — still projected at more than $4 billion for the end of June 2025.

But tax debates in Kansas are fraught because of a nationally notorious experiment in cutting income taxes in 2012 and 2013 under GOP Gov. Sam Brownback. Large budget shortfalls followed and persisted until bipartisan legislative majorities reversed most of the cuts in 2017 over Brownback's opposition.

Kelly won the first of her two terms in 2018 by running against Brownback's fiscal policies, and she still cites them in criticizing Republican proposals. She called the GOP plan she vetoed in January fiscally reckless.

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Republican leaders said repeatedly that they weren't repeating the mistakes of 2012 and 2013 and that, with its huge surplus, Kansas could sustain their proposed cuts.

But, unable to override a Kelly veto, they became less willing to chance having no cuts enacted this year. All 40 state Senate seats and 125 House seats are up for election this year.

"We've got to get something, and this is a compromise," said House Speaker Dan Hawkins, a Wichita Republican. "We need to get it done and get out of here."

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https://www.foxnews.com/politics/kansas-democratic-governor-republican-leaders-strike-tax-compromise-leaving-dissenters-both-sides