Citing Brownback budget cuts, Kansas Gov. Kelly vetoes GOP Legislature’s tax proposal

Kansas Governor Laura Kelly rejected millions of dollars in tax cuts and increases Friday, sending the package back to the legislature where prospects for overriding her veto are uncertain.

Kelly’s decision was not a surprise. Though she had been silent on the most recent version of the tax bill, she criticized earlier versions as sure to “blow a hole” in the state budget.

She repeated that sentiment Friday, telling reporters she had “obvious reasons” for the veto.

“I lived through the Brownback tax experiment. I saw what irresponsible fiscal policy did to our state,” Kelly said referring to budget reductions that followed tax cuts pursued by former Governor Sam Brownback.

“I can’t let that happen again.”

The measure, which includes about $130 million in tax cuts and $35 million in new sales taxes has a veto-proof majority in the Senate but will need three more votes than it had in the House last month to override Kelly’s veto.

Republican lawmakers said they were disappointed by the governor’s decision.

“This governor has never been a champion for the taxpayer, she’s only a champion for tax spenders,” said Sen. Caryn Tyson a Parker Republican and chair of the Senate tax committee.

In statements House and Senate GOP leaders pledged to override Kelly’s veto, calling the bill a “modest” proposal that would help Kansas recovering from the pandemic.

“Governor Kelly seems confused about which administration we are living in,” Speaker of the House Ron Ryckman (R-Olathe), House Majority Leader Dan Hawkins (R-Wichita) and Speaker Pro Tem Blaine Finch (R-Ottawa) said in a statement.

“She is now governor and her continued insistence on higher taxes, depriving Kansans of the benefits of federal tax cuts and increasing the tax burden on Kansas employers is the only experiment we are suffering through.”

The pieces of the bill addressing itemization and overseas profits have been sought by Republican lawmakers since the U.S. Congress passed major federal tax cuts in 2017.

Proponents said the measure would bring Kansas in line with the federal tax code and keep businesses in the state. Opponents contend that it would gut the state budget in the interest of cutting taxes for only the wealthiest Kansans.

Tyson, however, said the tax proposal was far less costly than the cuts of the Brownback administration.

“This bill would actually put money back in Kansas tax payers pockets that resulted as a state increase because of federal tax cuts, not because of actions taken by the state,” Tyson said.

“Her inaction demonstrates that she is going to try and grab as much money as she possibly can from the Kansas taxpayers.”

In 2018 and 2019, Kelly vetoed a bill to implement those policies. In February, she proposed that the legislature replace those cuts with an overall increase of the standard deduction and by applying Kansas sales tax to out-of-state retailers who sell products online in Kansas.

Kelly said her proposal would give relief to more Kansans without impacting the state’s budget.

The legislature instead added both of Kelly’s suggestions to the bill without removing any existing tax cuts. The new tax on online sales offsets about $35 million in costs.

“There’s a real push and insistence that we continue to cut taxes irresponsibly and not in ways that benefit the vast majority of Kansans,” Kelly said. “If they had accepted the package that we offered we would have reduced taxes on the vast majority of Kansans.”

The tax bill is the first measure Kelly has vetoed this year but it is not likely to be the last.

Several other bills recently passed by the legislature, including changes to election law and effort to ban transgender athletes from girl’s and women’s are awaiting action from Kelly.

Kelly, who has a history of supporting LGBTQ rights, indicated Friday she would not support the bill on transgender student’s participation in sports.

“The last thing that we need to be doing in the state of Kansas is implementing regressive policy that just turns businesses away from our state and kills jobs,” Kelly said.