With the entire session lasting just over 9 hours, the legislature passed two major plans: tax relief and STAR Bond plan. The new tax plan was a compromise between legislative leadership and the Governor and includes the following:
- A move from three tax brackets to two brackets
- New bracket rates of 5.2% ($0-23000 for single filers) and 5.58% ($23,001+)
- Increased Standard Deduction to $3605/single, $8240/married-joint
- Increased Personal exemption: $9160/single, $18,320/married-joint
- Social Security: Eliminates all income tax on social security
- Increased the Household and Dependent care credit to 50% of the federal allowable amount (up from 25% currently)
- Amended the state privilege tax (think income tax for banks) with the recent reductions in corporate income tax
- Property Tax: Increases the residential exemption from the state 20mills to $75,000 (up from $42,000); the bill also provides for a demand transfer from the SGF to backfill the lost revenue to K-12 education from this change in order to hold schools harmless
- Abolishes the statutory Local Ad Valorem Tax Reduction Fund (LAVTRF); this has not been funded in more than a decade
- Total Cost of approximately $1.232B over the next 3 years
The STAR Bond plan will allow the state to encourage economic development through construction and infrastructure. Some examples of projects discussed included the Kansas Speedway, Sporting KC Stadium, Legends, and Flint Hills Discovery Center in Manhattan. This package also allows the state to attract an NFL or MLB team from a neighboring state, such as the Kansas City Chiefs and the Kansas City Royals. The bonds could be issued to finance up to 70% of construction, would require a private investment of at least $1 billion, and would use sales taxes and alcohol taxes generated in the district, as well as some state gaming money.
The tax relief package passed the Senate 34-4 and House 121-2, with the STAR Bond plan passing the Senate 27-8 and House 84-38. Each bill now heads to the Governor’s desk for signature, which she has publicly stated she intends to sign. Now that the Special Session has wrapped up, the election and campaign season is back in full swing.
