Gov. Sam Brownback’s veto of House Bill 2178, “the largest tax increase in Kansas history,” stands after the Legislature fell three votes short of what was needed to override the governor.
The House voted to override the governor 85-40, which was one vote over the required two-thirds majority, and the senators voted 24-16, which was three votes short of what was needed to override the veto.
The bill would have raised more than $1 billion over two years through increasing income tax rates and ending an exemption for more than 330,000 business owners.Related:
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“This tax bill would have fixed what is called the LLC loophole,” Sen. Tom Hawk, D-Manhattan, said.
Hawk said Kansas’ current tax policy is unfair, as it allows certain business owners to not have to pay any taxes through the LLC loophole’s tax exemption.
“And that’s critical not just to raise money, but to have fairness in the tax system,” Hawk said.
Considering the revenue shortfalls the state is experiencing, Hawk said it was critical to have passed the bill.
“We need to have a tax bill because we have a revenue shortfall of around $325 million dollars just for the remainder of this year, and we have to fill that hole,” Hawk said. “And next year it’s predicted to be $580-590 million dollars.”Related:
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According to a message from the governor regarding the veto, the bill would have increased taxes on Kansans. Taxes would have increased from 4.6 percent to 5.25 percent for married Kansans filing jointly who earn at least $30,000 per year, and from 4.6 percent to 5.45 percent for those who earn over $100,000 per year.
Brownback said he does not believe businesses and the working class should have to pay for the revenue shortfall.
“(The veto) is based in my belief that as the elected public servants of Kansas, we must not choose to resolve budget challenges on the backs of middle-income Kansans with retroactive personal income tax increases,” Brownback said before signing his veto. “Working families and small businesses are the backbone of our economy, and we should not punish them.”
Hawk said he is “more than a little frustrated” at his Senate colleagues who did not override the governor.
“I think their failure to stand up to the governor actually puts our state in great jeopardy, particularly of public education and higher education, as well as the disabled and the other programs we have that are critical to our citizens,” Hawk said. “We have been cutting since 2008, we have frozen our school funding, so we have so many things that are in my view crashing in state government. We are in a devastating place with our state budget.” Related:
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Hawk said it will not be an easy task for the Legislature to “finish its work” on tax plans in 90 days and that the longer they wait, the harder it will be to fix the budget crises.
“I want to be optimistic, but I am quite literally very afraid of what’s coming,” Hawk said. “I am about as frustrated as I’ve ever been with the Kansas Legislature and its failure to do its job.”
