In this issue …
- Budget agreement reached
- Senate makes tax counter-offer
Budget agreement reached
House and Senate negotiators have reached an agreement on a budget, which is expected to be discussed and voted on in the Kansas House Wednesday afternoon. The budget is now contained in Senate Bill 171, an education finance bill that has been gutted and the budget inserted.
The bill includes a 1.5% cut to higher education institutions and a slight reduction in the reduction in salaries and wages (from $34.7 million to $22.6 million from the State General Fund).
Senate makes tax counter-offer
The Tax Conference Committee met twice Tuesday. The Senate made the House an offer. The House is expected to make a counter-offer Wednesday morning at 9:30, when the negotiators meet again.
Here’s the Senate offer:
1. 6.25% sales tax – the current sales tax is 6.3% and is due to drop to 5.7% July 1. The House had previously offered a 6.0% sales tax. This keeps most of the current “temporary” sales tax, which the House leadership has objected to strongly.
2. All itemized deductions would be reduced on this schedule:
- 2013 25%
- 2014 45
- 2015 55
- 2016 70
- 2017 85
- 2018 100
3. The top income tax bracket would be reduced on this schedule:
- 2013 4.8%
- 2014 4.6
- 2015 4.5
- 2016 4.4
- 2017 & 18 3.5
4. The bottom income tax bracket would be reduced on this schedule:
- 2013 2.9%
- 2014 2.8
- 2015 2.7
- 2016 2.6
- 2017 & 18 2.5
5. Standard deduction would be $5,000 for head of household, $6,500 for married, beginning in 2013.
6. Under this Senate offer, ending balances in the state’s checking account are projected to be:
- 2013 10.1% of the general fund
- 2014 9.6%
- 2015 7.8
- 2016 7.2
- 2017 5.9
- 2018 0.6
Some notes of interest:
- This does not provide for a total elimination of the income tax. The previous House and Senate plans had some mechanism to totally eliminate the income tax.
- The reduction in deductions (or haircut) does not match the reduction in income tax rates. By 2018, most deductions are eliminated, but there is still an income tax. Several groups will likely object. The lead House negotiator, Rep. Richard Carlson, noted this was a mis-match.
The House negotiators want to meet again Wednesday morning at 9:30. They say they will have a counter-offer.