WICHITA, Kan. (KSNW) — Governor Laura Kelly wants support for three more tax cuts in Kansas, including an immediate cut to the remaining state sales tax on food.
The food sales tax dropped from 6.5% to 4% on Jan. 1, and, under the current law, it will drop to zero in 2025. However, Kelly says the state can afford to drop it this year.
She was in Wichita Wednesday morning to convince lawmakers and the public to support three bills that she is calling her Axing the Taxes plan:
- Drop the state food sales tax to zero on April 1 and add children’s diapers and feminine hygiene products to the list of qualifying items.
- Create a four-day period in August where Kansas families can buy school supplies tax-free.
- Raise the threshold for retirees to pay income tax on Social Security from $75,000 to $100,000.
Kelly made her comments at Child Start: Fingerprints Head Start. Tanya Bullock, the organization’s executive director, said Child Start has 10 locations and spends about $10,000 yearly on diapers.
“Gov. Kelly’s Axing Your Taxes plan will not only impact the most vulnerable families that we serve here at Child Start, but it’s also going to impact our childcare providers who are trying to run their businesses,” Bullock said.
Can Kansas afford more tax cuts?
The governor said Kansas is in a good position financially.
“After years of deficit, we’ve been able to fully fund our schools, our roads, law enforcement, our foster care system, and we’ve put away over a billion dollars in rainy day funds,” she said. “Thanks to our responsible budgeting, we are now in a position to provide even greater relief to Kansans.”
Kelly said the key is for lawmakers headed to Topeka for the legislative session to focus on responsible budgeting.
“I’m sure some will propose this surplus for permanent and expensive tax plans that provide no relief for everyday Kansans, and that would be a mistake,” she said.
“Kansas is well-positioned to weather economic uncertainty, but we won’t continue to be in such a good financial position if the Legislature pursues irresponsible and reckless tax cuts that threaten our state’s fiscal health.”
When a reporter asked if the governor and her staff have taken a hard look at what it will mean if the state brings in less money, Kelly replied, “Of course.”
“You can trust that I, along with my budget director and other fiscal analysts, have done a deep dive and looked at our financial situation and looked outward,” she said.
“I am truly a fiscal conservative,” Kelly said. “I don’t spend money I don’t have, and I hate debt.”
Food sales tax cut
In the first part of her plan, the governor wants state lawmakers to pass her bill to end the state food sales tax immediately.
“Kansans still need the relief. The cost of groceries is too high, plain and simple,” she said. “Historically, the grocery tax in Kansas has been one of the highest in the country, which is ironic considering that we grow the food that feeds much of Kansas, much of America and much of the world.”
The governor said adding diapers and other necessities like feminine hygiene products to the food sales tax cut would save Kansans more than $20 million over the next three years.
Under the current law, shoppers must still pay city and county taxes on food. A reporter asked Kelly if there is any effort to get local jurisdictions to drop their food tax.
“I’m a big believer in local control,” the governor said. “In no way do I think that the State of Kansas ought to impose that upon our local communities.”
She was also asked about the mistakes some retailers made while switching to the lower state food sales tax on Sunday. The governor said she believes it was just a computer glitch.
“Having lived through several computer glitches in my time as governor, I’m going to give them a pass on this one,” Kelly said.
But she also said that the Kansas Department of Revenue would check compliance and investigate any complaints.
Back-to-school tax-free shopping
More than a dozen states, including Missouri and Oklahoma, offer parents a chance to buy school supplies tax-free. The offer is usually limited to a few days in August.
Kelly wants Kansas to join the list starting this year. Her bill calls for the tax-free period to begin on the first Thursday in August and end at midnight on the following Sunday.
“For parents throughout the state, this will make preparing for back to school more affordable. Shopping for school supplies can be tough. The supply list is long. The expenses add up.”
The governor says her proposal would help more than just parents.
“This bill will also be a big win for our early childhood educators and teachers who often pay an arm and a leg for pencils, art supplies and decorations,” Kelly said. “This will reduce that burden considerably.”
Again, her bill needs legislative approval.
Tax relief for retirees
The third element of the governor’s Axing Your Taxes plan is focused on senior citizens.
“Right now, Kansas retirees making $75,000 or less do not pay state income tax on their Social Security income,” Kelly said. “But once they earn $1 more, whether that’s through investments or a life insurance policy, the entirety of their Social Security income is subject to state tax. It’s bad policy to have such a cliff.”
She wants the threshold to be raised to $100,000. According to the governor, it will save senior citizens more than $50 million over the next three years.
The Kansas legislative session begins Monday, Jan. 9. Kelly credits bipartisan support last year for getting the current 2.5% state sales tax cut on food products. She says she needs that bipartisan support this year, too.
“Again, we will need bipartisan support. I am calling on legislators of both parties to support these bills and provide practical financial relief to Kansas families and retirees all across our state,” she said.
Kelly also wants citizens to contact legislators to ask them to support her tax cut proposals.
The KSN Capitol Bureau will be covering the Kansas Legislature. We will post updates as these, and other bills go before lawmakers.