TOPEKA, Kan. (AP) Kansas Democrats are attacking a Republican tax relief bill approved Thursday by the state Senate as a give-away to large corporations and managed to peel away a couple of GOP votes Thursday by highlighting how it benefits big businesses.
The bill is designed to prevent Kansas residents and businesses from paying higher state income taxes because of changes in federal tax laws at the end of 2017. The Senate vote was 26-14 , leaving GOP leaders one vote short of the two-thirds majority necessary to override a veto by new Democratic Gov. Laura Kelly, who has opposed the bill.
A key part of the bill would prevent thousands of individuals from losing itemized deductions on their state forms, but nearly three-quarters of the relief in the first year of the changes would go to businesses and much of that to corporations with international operations.
Theyve had tax breaks for years, and its time for them to start paying their fair share, said Sen. John Skubal, a moderate Kansas City-area Republican who was one of two GOP senators to vote no.
Kelly and other Democrats want to boosting spending on public schools and expand state Medicaid health coverage for needy families. But Republicans who have supermajorities in both chambers are making tax relief a top priority, which would make Kellys spending goals more difficult.
The populist arguments from Democrats havent given GOP leaders pause because many Republicans argue that the states business climate and economy will suffer if it doesnt provide corporate tax relief quickly.
Our young people are going to have fewer job opportunities and have fewer companies looking at Kansas, Senate President Susan Wagle, a Wichita Republican and the bills architect, said during its debate. We need to have an economic environment that encourages growth, encourages new jobs, encourages creativity.
The Kansas Department of Revenue estimates that the bill would save taxpayers $187 million during the next budget year, which begins in July.
Corporations would save $137 million of that, or 73 percent of the total tax relief, and $81 million or 43 percent of the total comes from provisions designed to prevent the state from taxing foreign income that it hasnt previously taxed.
How many multi-national corporations are small? House Minority Leader Tom Sawyer, a Wichita Democrat, said Thursday. Youre not talking mom-and-pops.
The federal tax changes included provisions preventing corporations from sheltering income and assets outside the U.S. that could lead to Kansas and other states taxing foreign income.
The Kansas Department of Revenue said the state is among only a dozen taxing one part of companies foreign income. Other parts could be taxed by more than half with the federal changes, according to a report last month from the conservative Tax Foundation.
In Kansas, Kellys called on legislators to wait at least another year to consider tax changes. Her staff has called the tax bill irresponsible, and Kelly spokeswoman Ashley All said Thursday that the bill benefits top income earners and does nothing for the people who need it the most.
A conservative GOP senator predicted Wednesday that the bill is headed for a big, fat veto. Republicans have the two-thirds majorities needed in both chambers to override a veto, but the Senate vote Thursday showed how Kelly could prevail if just a few GOP moderates bolt.
All 11 Democrats and the Senates one independent member voted against the bill. Republicans hold 28 seats, but Skubal and Sen. Mary Jo Taylor, a moderate western Kansas Republican, voted no.
