Kansas legislative leadership agreed to tax cuts. Here is how every tax plan compares

1. Kansas legislative leadership finally agreed to a tax plan after months of debate.
2. Gov. Laura Kelly has rallied enough bipartisan support in the Senate to stop some tax cuts.
3. The Kansas House has passed out multiple tax plans by overwhelming margins.

Kansas lawmakers have agreed to a tax cut plan just days before lawmakers returned to Topeka for a special session.

Passing a tax cut has been a daunting task in 2024 . Some plans pit Democrats and Republicans against each other. Other plans pit the House and Senate chambers against one another.

The compromise plan is just one of a half dozen that was considered this session.

Democratic Gov. Laura Kelly wants a tax cut that carves out less than $425 million a year from state revenues. She said that the state has worked hard to build up its budget surplus and that blowing that savings could toss the state back into chronic money problems.

Here is every major plan from this legislative session.

The (possibly) final compromise plan

• Has a dual-rate income tax. It will replace the current three-tier tax system in Kansas.
• Has “substantial exemptions” to help lower-income Kansans
• Reduces property taxes
• Repeals state tax on Social Security benefits

Full details of the plan haven’t been announced. Republican leadership said the latest plan is similar to tax cuts that failed, but this “contains minor adjustments to ensure the bill is quickly signed into law.”

The plans that passed before ran into opposition in the state Senate. Democrats and a few Republicans joined forces to kill past proposals, but they appear to be onboard now.

“Compromise is ugly sometimes. While this proposal is not what we fully wanted, in the spirit of compromise, it moves us forward,” said Senate Democratic Leader Dinah Sykes in an emailed statement.  “Senate Democrats will continue to fight for more property tax relief and child care relief, things we know our constituents truly want and need.”

Kansas Republicans’ flat-tax plan

• Tax all income at 5.25%. Income at or under $6,150 a year per person or $12,300 for couples would have been tax-free.
• Exempt Social Security benefits from the state income tax.
• Eliminate the tax on food sales on April 1 instead of Jan. 1, 2025.
• Increase property tax exemptions to $100,000 of appraised value.
• Raise personal exemptions and other various proposals. Read the full tax plan here .

That plan would have cut state tax revenue $1.6 billion over three years. It had little Democratic support and opposition from three key Republican senators to uphold the governor’s veto.

Supporters of the plan said it simplifies the tax code and gives everyone tax cuts. But opponents said one income tax bracket benefits the rich.

Kelly said well before the session she would never support a flat tax on income, but Republicans thought they had the votes to override a veto. The veto override was three votes short in the House and never made it to the Senate.

Laura Kelly’s first tax-cut proposal

• No cuts to income tax rates.
• Increasing standard deductions to $5,000 for individual taxpayers and $10,000 for married couples. That would be up from $3,500 for singles and $8,000 for couples.
• Increase property tax exemptions to $100,000 of appraised value.
• Exempt Social Security benefits from the state income tax.
• Immediately cut sales tax on groceries, diapers and feminine hygiene products.
• Create a four-day, back-to-school sales tax holiday in August. Clothing and school supplies would qualify.
• Read the full tax plan here .

The governor’s plan would cost the state $1 billion over three years. It almost fit Kelly’s requirement of costing less than $425 million per year. The plan averages out under that mark, but the first year would cost just under $450 million.

The plan got a committee hearing, but Republicans were worried about what items qualified as a back-to-school expense. Kelly’s first tax plan was pitched as a compromise, but Sen. Caryn Tyson, a Parker Republican, didn’t buy it.

“I wasn’t contacted,” said Tyson, the chair of the Senate tax committee, during the hearing. “Actually, nobody on this committee was contacted in the negotiations on that tax bill. I’d just like to point that out.”

A bipartisan, dual-rate tax plan

• Only two income tax brackets. Kansans making below $23,000 and married couples making below $46,001 would be taxed at 5.15%. Anything above is taxed at 5.55%.
• Exempt Social Security benefits from the state income tax.
• Increase property tax exemptions to $100,000 of appraised value.
• Eliminate food sales tax on April 1 instead of Jan. 1, 2025.
• Increase standard deductions among other proposals. Read the full tax plan here .

The proposal cost $1.5 billion over three years, including a hefty $636.7 million cost in fiscal year 2025. Each year after would cost $458 million to $468 million. That was too much for Kelly.

“Legislators must consider the legislation’s affordability beyond their next election,” Kelly said in her veto statement. “Send me a tax package that gives Kansans the relief they desperately need while not putting the state on the path to bankruptcy. ”

Kansas currently has three income tax brackets of 3.1%, 5.25% and 5.7%. Some lawmakers want just one tax bracket. Other lawmakers want three brackets with reductions to each one. So legislators compromised and settled on two brackets.

The plan sailed through the Kansas House 119-0. The Senate was one vote short of overriding the veto.

Laura Kelly’s second tax-cut plan

• Lower income tax brackets to 3%, 5.2% and 5.65%.
• Eliminate food sales tax on April 1 instead of Jan. 1, 2025.
• Increase property tax exemptions to $125,000 of appraised value.
• Increase standard deductions to $10,000, $7,500 and $5,000.
• Increase personal deductions and other proposals. Read the full tax plan here .

Kelly proposed the plan when she vetoed the dual-income tax plan. The plan got no attention in the final hours of session and a new tax plan was passed.

The second bipartisan, dual-rate tax plan

• Only two income tax brackets. Individuals making $23,000 and married couples making less than $46,001 would be taxed at 5.2%. Kansans earning more would get taxed at 5.57%.
• Exempt Social Security benefits from the state income tax.
• Increase property tax exemptions to $100,000 of appraised value.
• Eliminate food sales tax on April 1 instead of Jan. 1, 2025.
• Increase standard deductions and other proposals. Read the full tax plan here .

The plan costs $1.4 billion in the first three years. It’s a carbon copy of the other dual-rate tax plan with minimal changes to drop the price slightly. Instead of a $636 million cost in year one, it’ll be a $600 million cost with an around $430 million cost the years after that.

Lawmakers crafted the plan in the final hours of session. Senate Minority Leader Dinah Sykes, a Lenexa Democrat, was disappointed to see a proposal so similar to the vetoed plan despite Kelly’s concerns over the cost.

“(Senate) President Ty Masterson and (House) Speaker Dan Hawkins had the opportunity to put a compromise tax cut on the floor that was fiscally responsible and did not jeopardize our state’s long term fiscal health,” she said in a statement. “They failed to do so.”

This plan passed with similar support as the other plan and was vetoed, which triggered the special session.

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