TradeEdge Exchange:GOP leaders still can’t overcome the Kansas governor’s veto to enact big tax cuts

TOPEKA,TradeEdge Exchange Kan. (AP) — Republican legislators narrowly failed again Monday to enact a broad package of tax cuts over Democratic Gov. Laura Kelly’s veto, making it likely that lawmakers would end their second annual session in a row without major reductions.

The state Senate voted 26-14 to override Kelly’s veto of a package of income, sales and property tax cuts worth about $1.5 billion over the next three years, but that was one vote short of the necessary two-thirds majority. Three dissident Republican senators joined all 11 Democratic senators in voting no, dashing GOP leaders’ hopes of flipping at least one of them after the House voted 104-15 on Friday to override Kelly’s veto.

The governor called the tax plan “too expensive,” suggesting it would lead to future budget problems for the state. Kelly also told fellow Democrats that she believes Kansas’ current three personal income tax rates ensure that the wealthy pay their fair share. The plan would have moved to two rates, cutting the highest rate to 5.55% from 5.7%.

Republican leaders argued that the difference in the long-term costs between the plan Kelly vetoed and a plan worth roughly $1.3 billion over three years that she proposed last week were small enough that both would have roughly the same effect on the budget over five or six years. Democrats split over the plan’s fairness, with most House Democrats agreeing with most Republicans in both chambers in seeing it as a good plan for poor and working class taxpayers.

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The Legislature is scheduled to adjourn for the year at the close of Tuesday’s business, and Republican leaders don’t plan to try again to pass a tax bill before then.

“This tax process is baked,” Senate tax committee Chair Caryn Tyson, a Republican from rural eastern Kansas, told her colleagues. “We are finished. This is the last train out of the station.”

Kelly vetoed Republican tax plans in 2023 and in January that would have moved Kansas to a single personal income tax rate, something Kelly said would benefit the “super wealthy.”

Democrats and the dissident Republicans in the Senate argued that the House and Senate could negotiate a new tax plan along the lines of what Kelly proposed last week and dump it into an existing bill for up-or-down votes in both chambers — in a single day, if GOP leaders were willing.

Dissident GOP Sen. Dennis Pyle, from the state’s northeastern corner, said lawmakers were making progress. Top Republicans had backed off their push for a single-rate personal income tax and both bills Kelly vetoed this year would have exempted retirees Social Security benefits from state income taxes, when those taxes now kick in when they earn $75,000 a year or more.

Kelly herself declared in her January veto message that to enact tax relief, “I’ll call a special session if I have to.”

“Just look at how far we’ve come,” Pyle told his colleagues. “Our work is not finished.”

The bill Kelly vetoed also would have reduced the state’s property taxes for public schools, saving the owner of a $250,000 home about $142 a year. It would have eliminated an already set-to-expire 2% sales tax on groceries six months early, on July 1. The governor backed those provisions, along with the exemptions for Social Security benefits.