As expected, Gov. Sam Brownback's plan to overhaul the Kansas tax system is getting plenty of attention during the first month of the 2013 session of the Kansas Legislature.
Last week, the Republican-dominated Senate Assessment and Taxation Committee spent less than 10 minutes discussing a bill containing the governor's plan to eventually eliminate personal income tax, and on a voice vote, sent it to the full Senate for debate, which could occur as early as this week.
The committee endorsed Brownback's proposals to phase in a second round of reductions in individual income tax rates over four years. The bill also promises rates would continue to drop in the future if the state experiences healthy economic growth.
The committee backed his proposal to end a tax deduction for interest paid on home mortgages, but rejected ending the deduction for property tax on homes.
At least 200 members of the Kansas Association of Realtors participated in a rally at the Capitol on Wednesday in an effort to save both deductions. The group disclosed it had spent $195,000 on radio, newspaper and Internet advertising last month to build public pressure on lawmakers.
The revenues raised from scrapping the deductions would help stabilize the budget so the state could phase in the additional deductions and a move forward with a five-year plan to eliminate personal income tax.
The realtor group argues that dropping the deductions would hurt middle-class families the most. The Brownback administration argues that homeowners will see a net benefit from the next round of income tax rate reductions, even if the two deductions disappear. Brownback said Wednesday that home sales will grow if the state's economy is more robust.
The committee also backed a measure to cancel a decrease in the state sales tax that is scheduled to occur in July. The tax was raised to the current 6.3 percent three years ago to balance the budget, at the urging of former Gov. Mark Parkinson, but he and lawmakers promised the higher rate would be temporary.
Democrats have criticized Brownback's plan for concentrating on raising new revenue in its first three years and delaying most of the benefits from cuts in individual income tax cuts to the fourth and fifth years. The bill endorsed by the committee nets the state $949 million in additional revenues over the next three years starting in July, according to the Legislature's research staff.
Senate Majority Leader Terry Bruce, a conservative Hutchinson Republican, believes the Senate is likely to pass something similar to the committee's version. The Senate bill would then go to the House, where it is expected to be heavily amended before final approval. Three negotiators from each chamber would draft a final version of the bill and present it to each chamber for vote.
Page 2 of 2 - The tax legislation is SB 78. The governor's tax plan is in HB 2110.
Associated Press stories were used in the preparation of this report.