The 2015 legislative session is underway! Legislators gaveled in on Monday, January 12th and heard Governor Brownback’s annual State of the State address last Thursday (January 15th).
In his speech, Governor Brownback outlined his 2015 legislative priorities, including 1) overhauling the school finance formula, 2) continuing the march towards his “glide path to zero” income taxes, 3) moving local elections to November and 4) changes to the selection of Supreme Court justices. The next day, Governor Brownback released his proposal for the FY 2016 and FY 2017 budget. The proposal includes elimination of the school finance formula established in 1992 and replacing it with a block grant program. The governor also proposes more tax increases through an accelerated phase out of certain itemized deductions (including the home mortgage interest expense deduction) as well as significant increases to cigarette and liquor taxes.
In his State of the State message, the governor placed blame on the state’s self-imposed budget crisis on the “increases in K-12 spending since Fiscal Year 2014.” The fact of the matter is that the Governor’s tax policies have put us in this difficult position. The state is facing a budget shortfall of over $710 million (over one-tenth of Kansas’ SGF budget!) because of the sheer size of Governor Brownback’s income tax cuts (over $730 million a year starting in FY 2014) and the fact that they have not stimulated the economy as he promised. There’s really no avoiding the fact that the governor’s tax policies have put Kansas in a very deep financial hole. But I look forward to reaching across the aisle this session and working to restore some common-sense tax policies that will return our state to a sound fiscal footing.
I’ll do my best to keep you up-to-date in the coming weeks as legislators begin to work through specific budget issues. In the meantime, to access the Governor’s Budget Report in full, visit the Kansas Division of Budget’s website at http://budget.ks.gov.
On Wednesday, most of Governor Brownback’s tax plan that he discussed during the early days of this session made it to the Senate floor for debate. House Bill 2059 called for retaining the temporary sales tax rate (which was to sunset in July of this year), repealing the mortgage interest deduction, and making further cuts to personal income tax rates. The bill also includes clarifications and revisions of the original legislation which passed during the 2012 session.
Members of the Senate offered 11 amendments during five hours of debate. The first major amendment that passed added back the mortgage interest deduction but gradually reduces the value of ALL itemized deductions (with the exception of charitable contributions) by 94% for a six year period. What this means for the taxpayer is that $1,000 worth of deductions will only result in a return of $760 in tax year 2013, a return of $590 in tax year 2014, a return of $350 in tax year 2015, and a return of $60 in tax years 2016 and later. Deductions for gambling losses were also eliminated.
Amendments offered to sunset the temporary sales tax, to reinstate tax credits such as the disabled access tax credit, the child independent care credit, the food sales tax rebate, and the homestead tax credit, and to increase the standard deduction all failed.
The bill passed on a vote of 25-14. The bill now goes to the House for consideration.
I voted against HB 2059. Once again, low-income and middle-class working Kansans will be hit hardest under this bill while the state simultaneously faces huge negative ending balances starting in fiscal year 2017. In addition to being one of the largest tax increases in Kansas’ history, HB 2059 also violates the so-called principles of reform that Governor Brownback laid out last year. It further complicates the Kansas tax code by treating certain itemized deductions differently than others. Much more importantly, it actually takes more money out of the pockets of Kansas families that it puts in during the first four years of implementation. And even more disturbingly, the bill reneges on the promise the Kansas Legislature made to sunset the temporary sales tax when the tax was first passed in 2010.
This legislation is a continuation of tax policy designed to benefit big business and the wealthy at the expense of hardworking Kansas taxpayers. Hopefully the Kansas House will bring forward a more balanced solution for the House / Senate tax conference committee to consider.
The Kansas Legislature gaveled back into session this past Monday in Topeka to continue the people’s work. 2013 marks the first legislative session during Governor Brownback’s term where conservative Republicans are firmly in control in both the senate and house legislative chambers. Governor Brownback will most likely receive strong support for his legislative initiatives over the next two years, and it will be quite interesting to look back two years from now to see the various legislative changes that will have been enacted during that period.
For his 2013 State of the State address Governor Brownback outlined a number of policy proposals. Regarding education, he proposed a new “Kansas Reads to Succeed” initiative that pledges to provide $12 million to support innovative programs to help struggling readers, provide incentives to elementary schools that increase 4th grade reading proficiency, and require 3rd graders who do not read at grade level to not be promoted to 4th grade. As part of his “Road Map for Kansas,” he wants state income taxes to be lowered even further by cutting the lower income rate (currently 3.5 percent) to 1.9 percent and dropping the top rate (4.9 percent) to 3.5 percent. He also wants to raise the sales tax rate back up to 6.3% starting July 1st to help pay for last year’s income tax cuts. In responding to the recent district court ruling that the state’s current funding for education is unconstitutional, he called for the legislature to define in statute what constitutes “suitable provision” for the funding of education and strike the current reference in the Kansas constitution. He also proposed changing the way that the appeals court and Supreme Court judicial nominees are chosen by making them either elected or selected by the Governor. They are currently selected through a merit-based process by a commission of nine individuals.
The political makeup within our legislature has certainly changed during my past 10 years of service. From 2003 through 2010 a coalition of moderate Republican and Democratic legislators drove the legislative agenda in Topeka in both legislative chambers. The House coalition was effectively dissolved during the November 2010 elections as Democrats lost 16 House seats to conservative Republicans. Fast forward to the 2012 primaries, and the remaining Senate coalition that had been stymieing Governor Brownback’s agenda was likewise wiped out when 8 moderate Republican seats lost their seats. As Bob Dylan says, “The times they are a-changin”, and Kansas will now bear witness to a conservative political policy juggernaut I believe will be unprecedented in our state’s history.
As I did last year, I will once again be conducting town hall meetings at various locations throughout the district as we progress through the 2013 session. Notice for these events will be publicized in the near future. I hope to see you there!