House and Senate negotiators struck a tentative deal Wednesday to prevent changes in federal tax law from ratcheting up state taxes for Kansans.
The Senate wanted broader tax cuts in the same bill, but couldnt coax the House team to go along.
Rep. Steve Johnson, who chairs the House tax committee, said his chamber didnt want to go beyond addressing the federal impact in ways that would produce deeper cuts to state government revenue.
Its all of the tax cuts and these targeted tax cuts that have given us heartburn, he said.
Legislative staff and the Kansas Department of Revenue estimate the bill now on the table would cost the state about $80 million in revenue for the fiscal year that starts in July.
After Congress overhaul of taxes last year, it seemed some Kansans would end up paying more to the state because of changes to deductions and itemizing.
Legislative leaders want to avoid that by ensuring those Kansans can still itemize on state tax returns. The Senate pushed through a bill to that effect last month, arguing the state couldnt, in good conscience, profit from the federal reforms.
The surplus from this unanticipated windfall, Republican Senate President Susan Wagle urged, should be returned to the Kansas taxpayers.
But the Senate wanted tax cuts for Kansans beyond that. Its bill raised the standard deduction and fully reinstated deductions for mortgage interest, property taxes and medical expenses.
Senate negotiator Caryn Tyson, who is running for Congress, argued that after the Legislature passed a two-year $1.2 billion hike last year, raising the standard deduction would help all Kansans now looking at larger tax bills.
But with the state recovering from years of fiscal woes and facing pressure from the Kansas Supreme Court to increase funding for public schools, the House balked at that idea.
Ultimately senators backed down on the standard deduction during Wednesdays negotiations. They compromised with the House, too, on restoring the mortgage interest and other targeted deductions immediately. Instead those will be phased in.
