The week of June 5, 2017 at the Statehouse has already earned many adjectives ranging from historic to wrong-headed to disappointing. It was, in any case, momentous.
Having completed work on the all-important school finance formula, legislators turned their sights on taxes. On Monday night, the House and Senate approved a tax package and sent it to the governor. He swiftly vetoed the bill saying it would harm Kansas families and move the state away from its pro-growth orientation. On Tuesday, both bodies reconvened and debated into the evening before voting to override the veto. The tax package became law.
The final tax bill brings back a 3-bracketed income tax structure. For the 2017 tax year, the rate paid on income above $60,000 goes up from 4.6% to 5.2%. Next year that top rate will increase again to 5.7%. The bill also repeals the exemption on non-wage business income earned by pass-through entities, like LLCs, partnerships and sub-S corporations. Kansans will again be able to deduct their medical expenses, mortgage interest and property taxes (50% of such expenses in 2018 and all of them by 2020). The bill also extended to 2020 the STAR bond program which was set to expire in July. It imposes a one-year moratorium on new STAR bond projects, the rationale for which is not entirely clear. The tax bill will raise an estimated $591 million in Fiscal Year 2018 and about $633 million the next year.
Having, then, completed two of their three main jobs, school finance and taxes, lawmakers finished out the week and the 2017 session by finalizing the budget for the next two years. The budget leaves the state with an estimated ending balance of $157 million in Fiscal Year 2018 and $209 million in Fiscal Year 2019. State employees, including judges, will receive a raise; legislators won’t. The budget package also allows the Kansas Department of Transportation to issue up to $400 million in bonds over the next two years for road maintenance and repair.
Saturday, June 10, was the 113th day of the session. By that afternoon, the legislature had closed-up shop and left for home.
They will be back on June 26 for the formal Sine Die session. Sine Die is one of those Latin terms you act like you know but then Google the minute everybody at the lunch table starts talking about something else. It means the legislature will adjourn without setting a date to come back together; it’s the ceremonial end of the session for the year. If Governor Brownback vetoes the new school formula or the budget, which would be decidedly unceremonial, lawmakers will deal with it then. They might be called back to Topeka sooner if the Kansas Supreme Court rules the new school finance formula is still unconstitutional.
Barring either of those outcomes, this will be the final legislative update of 2017. Thanks for reading!