In a late night vote Tuesday, the Kansas Legislature voted to overturn a veto by Governor Sam Brownback of legislation that would essentially dismantle the tax breaks that are a cornerstone of the governor’s agenda enacted in 2012.
To overturn that veto it required 27 votes in the senate. The legislation had passed earlier by a vote of 26-14. The crucial vote change came down to local Senator Rick Wilborn (R-McPherson) who voted in favor of an override.
“There really was no other way out,” Wilborn said of the financial predicament the state currently faces. Wilborn called the bill “nothing to celebrate” but saw it as one way to adjust the course that the state was on. “I felt like we needed to turn the ship,” he said.
Wilborn was clear to add that much of the hype around the LLC tax loophole was overblown as the LLC tax only accounts for 29% of the tax brakes enacted in 2012.
“The Kansas economy is built on a three-legged stool of agriculture, oil and aviation – all of which are down,” Wilborn said.
Wilborn, who represents seven counties including McPherson County, said 65% of his constituents pay no income tax but McPherson County stands out as the third highest per capita income in Kansas.
While the tax plan may have populist appeal right now, Wilborn said many will not like paying more taxes as cuts to medical deductions and other surprises show up on their tax returns.
The bill replaces the state’s two-bracket income tax system with three brackets. Income up to $30,000 for married couples would be taxed at 3.1 percent, income between $30,000 and $60,000 would be taxed at 5.25 percent, and income above $60,000 would be taxed at 5.7 percent.
One hopeful takeaway from the new legislation is that Kansas can now move forward, according to Wilborn.
Representative Les Mason (R-McPherson), who was not present for the vote Tuesday due to family medical reasons, said he would not have voted in favor of an override. The house passed the veto override 88-31 with four more votes than were needed.
“This bill was much more than just putting LLCs back on the tax rolls. There will, also, be a negative impact on low and middle income Kansans, perhaps as much as the equivalent of a week’s or two weeks’ worth of groceries. The low income exclusion was dropped from $12,500 to $5,000 per family, which I thought was a step in the wrong direction,” Mason said.
Representative Don Schroeder (R-Hesston) did vote in favor of the override.
“Being on the budget committee, it has become almost impossible to manage the budget as it was. Borrowing long-term money to pay annual expenses is never a good policy. This will help resolve that issue, at least to some degree,” Schroeder said when reached for comment.