SPECIAL EDITION: Repeal and Replace, Kansas Style

May 16, 2017 by

Late yesterday at a meeting of the House/Senate Tax Conference Committee, House Chairman Steven Johnson (R-Assaria) proposed a complete repeal of the 2012 Brownback tax disaster, replacing it with the Kansas tax system prior to 2012.

Quite frankly, this is the best thing the legislature could do. With a full repeal, the billion dollar holes created by Brownback’s failed experiment would be filled and the state would have enough revenue to begin maintaining roads and highways again, provide for public safety services, restore the social service safety net, and meet their constitutional obligation to fund education. You might remember that in the early rulings on school finance in the Gannon case, the court specifically said that the state had enough money to fund schools but that the Governor and legislature chose to give that money away in the 2012 tax cuts.

Full repeal would immediately do three things that we believe are critical to any tax and revenue solution.

  • It would restore the third income tax bracket on higher earnings,
  • repeal the “glide path to zero” that would completely eliminate income taxes, and
  • return the more than 300,000 business owners to the tax rolls.

Whatever tax plan is ultimately adopted absolutely must contain these three provisions. There simply is no other way out of the Brownback mess.

This repeal proposal may come to a vote as early as this afternoon. We don’t know if this plan will pass; it is the largest tax plan proposed yet this year and it is likely that legislators will seek a compromise that preserves some portion of the individual income tax rate cuts. We believe that going forward no plan should ignore the three critical issues we listed above – at least three brackets, end the glide path to zero, and repeal the income tax exemption for business owners.

Also under consideration must be the school funding plan to meet the Gannon decision. The plan passed out of committee yesterday we believe to be completely inadequate and, if adopted, would be rejected by the Court. While the State Board of Education has called for nearly $900 million in new funding, Sub for HB 2410 provides only $279 million. Structurally, the formula in Sub for HB 2410 is sound but the funding is nowhere near what is required.

We are hopeful that members of the House will restore this bill to at least what it was as of last Friday – before the conservatives took over the Committee process and gutted the funding.

Legislators need to keep in mind that their job right now is to restore the state to fiscal stability by passing a responsible tax plan that repeals the most damaging parts of the Brownback tax failure AND to pass a school finance formula that is both funded and constitutional. And the two cannot be considered independent of each other. A failure to pass a robust tax plan will limit the opportunity to fund schools in a way that meets constitutional muster.