Kansas Faces New Fight Over Taxes      12/09 11:24

   TOPEKA, Kan. (AP) -- Kansas' new Democratic governor promised not to raise 
taxes to meet her goals of boosting spending on public schools and social 
services. Republicans who control the Legislature argue that a tax increase is 
coming even if state politicians do nothing.

   One of the first big political fights Gov.-elect Laura Kelly faces upon 
taking office in January will be over cutting income taxes. The state is 
receiving a revenue windfall thanks to changes in the federal tax code at the 
end of 2017.

   Kansas has been roiled by a debate over tax cuts for most of this decade, 
since a previous Republican experiment in slashing income taxes went awry and 
most voters came to view it as a failure. Lawmakers rolled back most of the 
experiment, and Kelly built her campaign on a pledge that Kansas wouldn't 
repeat it.

   Now, according to a spokeswoman, Kelly wants to "let the dust settle" and 
stabilize the budget before considering new tax changes. But there will be no 
hiatus: Top Republicans are saying that an early priority for them is rewriting 
income tax laws to cancel out the unintended revenue increase from the federal 
tax changes.

   "I've been working on it the past few weeks," said state Sen. Caryn Tyson, a 
GOP conservative and chairwoman of the Senate tax committee. "We should take a 
vote as legislators to say, do we want to stop that increase? Which I 
absolutely do."

   Policies championed by President Donald Trump and Republicans in Congress 
slashed federal income taxes but included provisions that will have some people 
paying more to their home states. The federal standard deduction increased --- 
further limiting who can itemize --- and it triggered a change in Kansas 
because its tax code is tied to federal law.

   The federal overhaul is expected to raise revenue in some states and lower 
it in others. Officials in Georgia, Idaho, Iowa, Missouri and Utah cited new 
revenues in justifying state tax cuts adopted this year. In each, Republicans 
control the governor's office and legislature.

   Kansas officials have struggled to calculate the size of the boon. One early 
estimate put the gain at $138 million for the state's current budget year. By 
last month, they had whittled the figure to $84 million.

   That uncertainty hurt efforts by Republicans to rewrite Kansas tax laws 
earlier this year. They passed a bill in the Senate, only to see it fall a few 
votes short in the House.

   A bill has a better chance of passing in 2019. While voters statewide chose 
Democrat Kelly, a veteran state senator from Topeka, as the next governor, 
local contests left the Legislature more conservative.

   "A lot of Republicans ran on giving that money back to the taxpayers," said 
state House Speaker Ron Ryckman Jr., a Kansas City-area conservative.

   But Kelly plans to increase spending --- for public schools alone, possibly 
$90 million a year --- which could require the state to keep that tax revenue.

   "Kansas still faces massive financial challenges," said Kelly's spokeswoman 
Ashley All. "After years of self-inflicted budget crises, we need to be more 
cautious and fiscally responsible."

   Kansas was ground zero for a national debate over trickle-down economics 
after then-Republican Gov. Sam Brownback successfully pushed GOP legislators to 
slash income taxes in 2012 and 2013 in hopes of stimulating the economy. 
Persistent budget shortfalls arose, and Kansas became a cautionary tale, even 
for Republicans elsewhere who favored tax cuts.

   Voters turned on Brownback's legislative allies, and bipartisan majorities 
in 2017 reversed most of his tax policies , raising income taxes $600 million a 
year.

   In the November election, voters had an overwhelmingly negative view of 
Brownback's tax experiment: 77 percent said his tax policies were bad for 
Kansas, according to AP VoteCast, a survey of more than 115,000 midterm voters 
nationwide, including nearly 4,000 in Kansas. The margin of sampling error 
among Kansas voters was plus or minus 2 percentage points.

   Kansas voters had a more favorable view of the federal tax cuts. According 
to AP VoteCast, about half, or 51 percent, said they approve, while a little 
less than half, or 44 percent, said they disapprove.

   Many Republicans view adjusting state tax laws as a moral imperative. New 
House Majority Leader Dan Hawkins, a conservative Wichita Republican, said the 
state is "just robbing" taxpayers.

   Democrats acknowledge that they worry about lower-income families being hurt 
by inaction. New House Minority Leader Tom Sawyer, a Wichita Democrat, said he 
is open to working with Republicans on legislation dealing with itemized 
deductions but fears GOP lawmakers will push for tax breaks for multinational 
corporations.

   Jared Walczak, a senior policy analyst for the conservative Tax Foundation, 
said revenue windfalls allow states to pursue broader tax reforms, citing 
Georgia, Iowa and Vermont as examples. He said reverting to a state's previous 
status quo on taxes is "the path of least resistance."

   "You're missing an opportunity," he said. "Other states are saying this is 
an opportunity for meaningful reform."


(KA)