COLUMNS

About those Topeka 'tax cuts'

Paul Waggoner
Rep. Paul Waggoner

Five weeks into the legislative session and the 2019 Freshman class still enjoys memorable first-time experiences -- like a Valentine’s Day pianist in the Capital's rotunda and how well and beautifully sound travels from one strategically placed source.

That same day we witnessed our first-ever display of parliamentary gymnastics. Strategically-placed Democrat amendments were brought forth on the House floor to keep Governor Kelly’s KPERS re-amortization plan from going down to defeat.

I have to give them credit, they showed a lot of pluck and bravado, but it was all for naught.

The maneuvers were interesting but ineffective, and the measure suffered a resounding 86-37 defeat.

The next significant legislation up in the House this February should be Senate Bill 22, on adjusting the Kansas tax code due to changes in Federal law passed in 2018. In The News, you have seen critical op-eds about tax “windfalls” or the “tax cuts Kansas can’t afford.”

I don’t think these criticisms stick. Here is why.

For one, SB22 isn’t even a tax cut. A cut implies a reduction to what you were expecting, or to some drop in rates. This law is actually just preventing a tax hike — one caused by unforeseen changes in Federal tax law.

Savvy observers note that when the 2017 Legislature passed the biggest tax increase in state history, they thought they had a bought into a $600-700 million increase in taxes (23-24 percent overall).

But low and behold, look what actually happened when you compare 2017 estimated numbers to 2018 estimates or actual results.

Income tax collections have gone from $2.67 billion to over $4 billion in 2 years!

SB22 “reduction” is estimated at $187 million in FY2020 and about $110 million in later years.

You could shave that amount off 2019 figures and you are still $400 million ahead of where anyone anticipated in 2017!

Some have complained that on an individual level the “bulk of the savings will be for those who earn more than $100,000 per year” (News, February 10). But if state data shows over 60 percent of all Kansas income tax is paid by families earning over $100,000 per year. Even that complaint doesn’t stick.

The GOP caucus, and legislatures in blue and red states across the nation, relied on data from the State Taxes After Reform Partnership (www.star-partners.org). I think their data and analysis is compelling.

The talk in Topeka is that SB22 might also become the vehicle for adjustments to state sales tax rates, especially the rates on groceries. We shall see.

Laura Kelly might not have felt the love on Feb. 14 but we all should hope she sees the light when these worthy measures reach her desk.

Topeka will continue to be a learning ground for all us freshman legislators in 2019. Freshman governors I expect as well.

 Rep. Paul Waggoner represents District 104 in the Kansas House.

Year                                        FY 2017         FY 2018        FY2019   % change17-19

Total Taxes (Nov 17 est)            $ 5.82b            $ 6.49b          $ 6.63b     13.9%

Total Taxes (2018 est)               $ 5.82b              $ 6.71b          $ 6.95b     19.4%

Actual Taxes                             $ 5.82b             $ 7.03b           $ 7.24b?   24.3%

Incomes Taxes only (Nov 17 est) $ 2.67b           $ 3.29b          $ 3.39b     27.0%

Income Taxes only (2018 est)    $ 2.67b              $ 3.52b          $ 3.73b      39.7%

Actual Income Taxes                  $ 2.67b              $ 3.81b          $ 4.01b?    50.1%   

(Sources KS Legislative research Nov 2017, Nov 2018 figures)