KEPC UPDATE: School finance debate schedule, tax bill debate Wednesday

In this issue …
 
House schedules school finance debate
Another income tax bill debate Wednesday morning
 
 
House schedules school finance debate
 
Democrats and some Moderate Republicans have argued all legislative session that a new school finance formula should be debated BEFORE the legislature works on a tax increase bill.  That is one big reason a proposed income tax bill failed in the Kansas House of Representatives Tuesday night.
 
It now appears a school finance debate will happen in the Kansas House Wednesday.
 
House Majority Leader Don Hineman (R-Dighton) announced Tuesday that the House version of school finance, HB 2410, will be on general orders for debate Wednesday.  That debate will probably take place Wednesday afternoon after one.
 
 
The bill provides an additional $226.8 million in state general fund spending for schools in FY 2018 and an additional $370 million in FY 2019.  It’s unclear if that will be enough to satisfy the Kansas Supreme Court.
 
The House debate is expected to take several hours.  The bill will be subject to amendments that can change it before a final vote takes place.
 
Meanwhile, the Senate Select Committee on Education Finance continues to work on its bill and will continue on Wednesday.
 
Another income tax bill debate Wednesday morning
 
House and Senate tax negotiators have approved yet another income tax/revenue bill to try to balance the state budget.  The measure is expected to be debated Wednesday morning in the House of Representatives. The House goes in at nine in the morning.
 
The latest plan has been inserted into a conference committee report on Senate Bill 30.  That’s the same bill that was defeated Monday night, but it now has different contents.
 
It’s a combination of income tax, removal of sales tax exemptions, increases in liquor taxes and some items that do not raise money, but spend money.
 
Here’s what I understand is in the bill:
  • There would be two income tax brackets with rates of 3 percent and 5 percent
  • The “glide path to zero” trigger mechanism is eliminated
  • Business pass through income would be taxed
  • Medical deductions would be at 100 percent beginning in 2018
  • Several sales tax exemptions on services would be removed to raise money including:
    • Towing
    • Detective services
    • Security and patrol services
    • Security systems
    • Non-residential cleaning service
    • Pet care
    • Self storage
    • Personal care (tattoo, tanning, and piercing, etc.)
    • Expanded lawn services (landscaping, etc.)
    • Companion animal veterinary services
  • The Liquor enforcement tax would be increased by two cents
 
In addition, the extension of STAR Bonds would be included with the one-year moratorium proposed in HB 2184, except that projects with bonds authorized and issued by October 1 would be able to proceed.
 
The Ad Astra economic development program proposed in HB 2168 would be enacted with only half the proposed tax credits issued ($10 million per year for five years)
 
The aviation tax credit bill (HB 2036) would be included in the package.  That would cost the state an estimated $7.7 million the first year.
 
The bill would raise an estimated $488 million in FY 2018 and $460 million in FY 2019.  Many lawmakers will likely argue that is not enough.  Prospects for this bill are slim without support from Democrats unless 63 Republican votes can be found.