December 7, 2016

“Rise Up Kansas” coalition calls for tax reform in 2017
Statewide leaders announce tax policy proposal for upcoming legislative session

TOPEKA – On Wednesday morning, the Kansas Center for Economic Growth (KCEG) hosted a joint press conference to address the detrimental and ongoing budget crisis in Kansas. Various statewide leaders spoke alongside KCEG as members of the “Rise Up Kansas” coalition, an initiative dedicated to comprehensive tax reform in 2017.

“The first year of the Brownback tax plan inflicted more damage to state finances than the entire Great Recession,” said KCEG Executive Director Heidi Holliday. “If we’ve learned anything in the last four years, it’s that we can’t have it all. Yes, it would be nice if we could eliminate the state income tax and still enjoy the quality of life we expect – and deserve – in Kansas. But every month we learn how impossible that scenario is, whether in the form of new budget cuts or missed revenue targets or credit rating downgrades. We have to make a choice.”

The Rise Up Kansas proposal includes the following provisions:

  • Ends the “March to Zero,” stopping the further phase out of individual income tax rates and preventing future budget crises.
  • Re-instates the top income bracket of 6.45% for single filers earning $40,000 a year or more, turning the the tax code “right side up” so everyone chips in.
  • Closes the “LLC loophole,” cleaning up the tax code and ensuring it’s not benefiting a select number of Kansans at the expense of the common good.
  • Holds the Kansas Highway Fund harmless for the first time since Gov. Sam Brownback took office by temporarily diverting the 4/10 of a cent sales tax currently dedicated to the State Highway Fund to the State General Fund for a period of three years while also pairing the sweep with an equivalent increase in the state gas tax of $0.11 per gallon.
  • Reduce the state sales tax on food by 1.5 percent, taking the rate from 6.5 percent to five percent.
  • Net Impact: Generates approximately $820 million for the State General Fund in Fiscal Year 2018 while putting $100 million back into the pockets of Kansas families for groceries.

Leaders of the coalition include Annie McKay of Kansas Action for Children, Bob Totten of the Kansas Contractors Association, Mark Desetti of the Kansas-National Education Association, and Rebecca Proctor of the Kansas Organization of State Employees.

“There are lots of ways to modernize our tax code and broaden our base,” said KCEG Senior Fellow Duane Goossen. “We’re offering a good starting point here today. This is a commonsense, straightforward plan. It will fix the core problems plaguing our budget while holding the line or reducing taxes for 70% of Kansans. This fiscal mess presents a great opportunity for an overhaul, and no matter how lawmakers close the gap, we urge them to take a comprehensive approach.”

The Institute on Taxation and Economic Policy provided the following analysis of the impact of the proposed income tax changes and the elimination of the LLC loophole:

“This is our chance to hit ‘reset’ on failed tax policy in 2017,” said Annie McKay, President and CEO of Kansas Action for Children. “But the worst thing lawmakers could do is delay action another year or cobble together yet another one-time fix. The Brownback tax plan just didn’t work, and now we’re at the end of the line. Let’s make the right decisions in 2017 so we can start investing in our children and planning for the future.”

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ClayRELEASE: “Rise Up Kansas” coalition calls for tax reform in 2017