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Legislative Update-Veto Session


Tax Policy for the State of Kansas:  Senate Substitute for House Bill 2109

 

Friday, June 12, marked the 113th day of the 2015 Legislative Session, the longest session in history for the state of Kansas.  Early on Friday morning, the House passed Senate Substitute for House Bill 2109 by a margin of 63 votes, the amount needed to pass out of the House of Representatives.  This tax bill was not the tax bill that I desired to address the financial issues with the state of Kansas, however given our lengthy session, we were approaching deadlines that were unprecedented and needed to meet our constitutional obligation of balancing the Kansas state budget.  The details of HB 2109 are:  raising the state sales tax rate from the current rate of 6.15% to 6.50%; tax amnesty for certain delinquent taxes; guaranteed payments would be subjected to income tax rates; income tax rate freeze until the tax year of 2018; the Rural Opportunity Zones extension until 2022; with the exception of Charitable (100% deduction), Mortgage Interest, and Property Taxes (50% deduction), all other deductions would be repealed; and Cigarette Taxes would increase by $0.50 a pack.  There were also some policy provisions that were added by the Senate such as Sales Tax Exemptions, Property Taxes imposed by local units of government, and tax credits for scholarships.  However, these policy pieces were changed by the House in Senate Bill 270 to not have the effect that the Senate had initially desired.

 

My true conviction is that this tax bill that passed the legislature, and now awaits the Governor’s signature, is not a long-term, sustainable tax policy.  In order to generate long-term stability for our state, we must readdress the tax policy that was passed by the 2012 legislature.  That is the cause of the financial duress that our state is currently experiencing and the plan that passed will only be short-term.  Due to the fiscal deadlines that our state was approaching and allotments that would need to be made to the budget, for example Fort Hays State University would experience a $32 million reduction, I voted “yes” thinking of the best interest of our state, residents, educational institutions, and our disabled citizens. 

 

 House Bill 2135

Senate Substitute for House Bill 2135 would authorize the Governor’s Director of the Budget, if the Director determines the unencumbered ending balance of the State General Fund will be less than $100 million, to lapse appropriations or transfer funding from special revenue funds to the SGF from Executive Branch agencies, up to a total of $100 million, for FY 2016. This authority would not apply to appropriations for debt service; employer contributions to the Kansas Public Employees Retirement System; the Department of Education, except the operating expenditures account of the SGF; or demand transfers to the school district capital improvements fund.  This bill was passed to protect these funding measures from an allotment from the Governor.  I voted “yes” on this measure and it passed both the House and Senate on Friday, June 12. 

The Group of 28

During the final two weeks of the session, and with no solid tax plan in place, there was a group of 28 conservative Republican House members, I included, that contend we must address the 2012 tax plan.  The leader of our group was Representative Mark Hutton from Wichita and we met regularly to discuss our position and drafted plans that we wanted to be included in the final tax policy that we hoped would be passed. 

We were able for the tax conference committee between the House and Senate to allow for our plan to be debated and voted on the House floor, however it only received 27 affirmative votes.  Later, we tried to meet with other groups within the House to compromise and hopefully have enough votes for passage. 

There were five identifiable groups within the Kansas House of Representatives:  The conservative base was split between two factions, ours included, moderate Republicans, Democrats, and then the legislators that were absent during the latter part of the session. 

These meetings with the other groups, with the exception of the absent legislators, could not materialize because of differing ideologies, and the threat of non-passage of our position by the Senate and a veto by the Governor if components of our plan of reinstating LLC’s, sole proprietorships, and S Corps back on the income tax rolls, even at the lowest income bracket rate, we acknowledged that at this moment there would not be enough votes in our chamber to get to the magic number of 63 for passage.

Even though we were at an impasse, our group fought for our position until late Thursday evening.  However, with the looming fiscal deadlines and the latest proposals of cutting our regent institutions, we had no choice but to accept the plan before us.

Later, we did hear from others in the chamber that voted “no” on our plan when it was debated and voted on the House floor said that our plan was the best solution for our state’s fiscal crisis.  Although we do identify that the plan that has passed is only a short-term solution, our resolve is to revisit our plan at the beginning of the 2016 Legislative Session. 

Explanation of Vote and Contact Information

As your public servant, I feel that it is my duty that you are aware of my explanation of vote that I submitted to the House Clerk after voting “yes” and having it read before the entire chamber.

“Madam Speaker, I vote yes on House Bill 2109 in order to protect the solvency of our higher educational institutions for the state of Kansas.  This committee report does not address all the possible revenue streams in order to resolve our financial calamity that our state currently faces, however as a representative of the Kansas House, we need to claim responsibility and make certain that we provide funding for our government and its needs.  In extreme situations as in these, we need to make certain that we do not jeopardize our citizens, institutions, and our state.” 

If you have any concerns, feel free to contact my office at (785) 296-7672, visit www.troywaymaster.com or email me at troy.waymaster@house.ks.gov

The honor to serve you in the 109th Kansas House District and the state of Kansas is one I do not take lightly. Do not hesitate to contact me with your thoughts, concerns and questions.  I appreciate hearing from the residents of the 109th House District and others from the state of Kansas.     

Troy L. Waymaster,

State Representative

109th Kansas House

300 SW 10th

Topeka, KS  66612

Paid for by Troy Waymaster for 109th Kansas House, James Malone, Treasurer
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