Budget and Taxes

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by Ann Mah

The Senate passed out a budget for the 2018-2019 fiscal years. It spends about $800 million more than the state expects to take in over the next two years. This bill does not take into account additional funding for K12 education, KanCare expansion, highway funds, or the state water plan. It does include a pay raise for state employees for the first time in a decade. It also includes a pay raise for those who provide Home and Community Based Services. It also restores funding for higher education and stabilizes the Children’s Initiative Fund for early childhood education. The House is working on its budget, expected to be debated this week.

The House tax committee passed out a tax plan this week that includes a 5% flat income tax and puts LLCs and small businesses back on the tax rolls. It raises the standard deduction that 70% of Kansas tax filers use. It raises about $850 million over the next two years. It also lowers the sales tax on food from 6.5% to 5% in 2019. There isn’t much enthusiasm for a flat tax, as it is regressive, taxing the poor more than the wealthy. This bill is expected to be debated in the House this week. The Senate has no tax bill coming out yet.

Keep in mind that all of these bills are starting points for negotiation. The final work will not be done until the May veto session and the two houses conference on the bills.

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