Jeff Pittman's Statehouse Update - May 17, 2017

Hello from Topeka. I wanted to provide an update from last week in the Legislature and at home.


Lowering Food Sales Tax & Keeping Low Taxes on Riverfront

Debate on Friday largely focused around a couple of amendments on city and county retailers’ sales tax in Marion County. An amendment came out which raised taxes on services to pay for a reduction in food sales tax. The first time this type of amendment came up, I voted against it because there was no data provided on how much the taxes were increasing and on whom. This time the reduction in food sales tax was matched with doing away with certain sales tax exemptions which seemed to be an adequate tradeoff so I voted to reduce food sales tax on the first amendment to HB 2380. That vote failed with only 55 votes out of a required 63.

A second amendment was proposed by moderate Republicans that raised taxes on services with a promise to lower food sales tax in 2020. Unfortunately, while this broadening of the base is actually a good thing as it spreads the burden, the focus was on hard working person’s occupations like towing and cleaning services and didn’t touch some of the higher end service exemptions like lawyer services. Plus the 2020 date does not necessarily bind future legislators.

One of the more controversial taxes the bill put in place was on certain gym memberships run by non-profits like YMCA and our local Riverfront Community Center. While the bill passed with these new taxes at out of the house, I was able to amend the bill to stop from raising taxes on YMCA/YWCAs and on local community center memberships and services like ours at the Riverfront Community Center.  My amendment passed 68-52.

Education Finance

The challenge we have is that because the Legislature’s budget last year was ruled inadequate, if the Legislature does not fully fund a plan that addresses the education requirements of equal education for all across the state as well as having a focus on the bottom performing 25%, the Courts will remain in the picture and continue to be forced to make rulings. Some entities claim there is proof that another $750 Mil is needed or more per year. The current form of the bill does not provide that. Other entities, such as the Koch backed Kansas Policy Institute, state there is no need to raise revenues and that the schools don’t need that much money.

So the debate continues. The education finance committee has been back and forth on the details in the formula. There was a requirement that made the state pay for kids behavioral therapy amended in that has now been amended out. The committee appears to only be willing to look over the next two years in the current funding formula but I’ll know more over the next two days. The committee has voted to move the bill to the House floor, which will allow further debate and changes.

 

Foster Care Bill

H Sub for SB 126: The house approved with final action a bill that establishes the foster care task force. The foster care system in Kansas is in need of attention that it hasn’t had in a number of years. There is widespread opinion that our Kansas kids are at risk and are getting lost in the system; this bill is a step in taking corrective action.

 

New Form of Corporation for Kansas

House Bill 2153 was signed into law Monday by the Governor after passing out of the House and Senate (the language was put into what is called the scrap metal bill when you look up the history of the bill). This law allows formation of a type of corporation like Ben & Jerry’s Ice Cream or Patagonia—they make it part of their corporate mission to donate some portion of their profits towards a certain cause. This doesn’t affect the state’s revenue on these corporations; rather it’s a form of corporate governance that makes it legal not to have shareholder profit as the primary purpose of the corporation. That way, the corporation can donate as it wishes to the dedicated cause without getting sued by shareholders.

 

Revenue

The state budget is still unsupported by revenues as explained by the Kansas Center for Economic Growth here. The author was a seven-term member of the Kansas House of Representatives and a budget director for 12 years under three governors. He notes a $900 Mil budget gap that needs to be closed to stabilize our financial situation.

For comparison’s sake, I like to review data from different sources. As consolidated at this site and others, here are state by state tax brackets. There are 7 states with no income tax, making up for that revenue in property, sales or some type of industry tax like on oil or tourism as in Florida. After Brownback’s tax experiment in 2012, giving LLC income a tax holiday and slashing rates, Kansas has a current low end tax bracket of 2.7% and an upper end of 4.6%.

Because revenues were cut so drastically, the administration and Legislature were not able to put together sustainable budgets, driving us to constantly spend above revenue intake and forcing borrowing and constant credit downgrades. It’s time for fiscal responsibility to stabilize the state’s finances. While no one has offered up a 13.3% tax bracket on $1mil++ yet, there is serious talk of having another bracket open up at a higher income range.

Individual State Income Tax Rates 2017

State

Tax Rate

Brackets

Top Income Range

Alabama

2.0 - 5.0%

3

$3,000 (S) - $6,000 (M)

Alaska

None

 

 

Arizona

2.59 - 4.54%

5

$152,668 (S) - $305,336 (M)

Arkansas

0.9 - 6.9%

6

$ 35,099

California

1.0 - 13.3%

10

$1,000,000 (S) - $1,074,996 (M)

Colorado

4.63%

1

Flat Rate

Connecticut

3.00 - 6.99%

7

$500,000 (S) - $1,000,000 (M)

Delaware

2.2 - 6.6%

7

$60,000

Florida

None

 

 

Georgia

1.0 - 6.0%

6

$7,000 (S) - $10,000 (M)

Hawaii

1.40 - 8.25%

9

$48,000 (S) - $96,000 (M)

Idaho

1.6 - 7.4%

7

$10,905 (S) - $21,810 (M)

Illinois

3.75%

1

Flat Rate

Indiana

3.3%

1

Flat Rate

Iowa

0.36 -8.98%

9

$70,785

Kansas

2.7 - 4.6%

2

$15,000 (S) - $30,000 (M)

Kentucky

2.0 - 6.0%

6

$75,000

Louisiana

2.0 - 6.0%

3

$50,000 (S) - $100,000 (M)

Maine

5.80 - 10.15%

4

$250,000 (S) - $300,000 (M)

Maryland

2.0 - 5.75%

8

$250,000

Massachusetts

5.10%

1

Flat Rate

Michigan

4.25%

1

Flat Rate

Minnesota

5.35 - 9.85%

3

$156,911 (S) - $261,510 (M)

Mississippi

3.0 - 5.0%

3

$10,000

Missouri

1.5 - 6.0%

10

$9,072

Montana

1.0 - 6.9%

7

$17,600

Nebraska

2.46 - 6.84%

4

$29,830 (S) - $59,180 (M)

Nevada

None

 

 

New Hampshire

5.0%

 

Dividend and Interest Income Only

New Jersey

1.40 - 8.97%

7

$500,000

New Mexico

1.7 - 4.9%

4

$16,000 (S) - $24,000 (M)

New York

4.00 - 8.82%

8

$1,077,550 (S) - $2,155,350 (M)

North Carolina

5.499%

1

Flat Rate

North Dakota

1.10 - 2.90%

5

$416,700

Ohio

0.495 - 4.997%

9

$210,600

Oklahoma

0.50 - 5.25%

6

$7,200 (S) - $12,000 (M)

Oregon

5.0 - 9.9%

4

$125,000 (S) - $250,000 (M)

Pennsylvania

3.07%

1

Flat Rate

Rhode Island

3.75 - 5.99

3

$139,400

South Carolina

0.0 - 7.0%

6

$14,650

South Dakota

None

 

 

Tennessee

6.0%

 

Dividend and Interest Income Only

Texas

None

 

 

Utah

5.0%

1

Flat Rate

Vermont

3.55 - 8.95%

5

$416,700

Virginia

2.00 - 5.75%

4

$17,000

Washington

None

 

 

West Virginia

3.0 - 6.5%

5

$60,000

Wisconsin

4.00 - 7.65%

5

$274,350 (S) - $329,810 (M)

Wyoming

None

 

 

District of Columbia

4.00 - 8.95%

4

$1,000,000

Note: S = Single Filers, M = Married Filing Jointly, else one set of income brackets applies.

 

However, as noted in my last update, without a constitutionally approved education finance bill, we can’t tell how much we need to spend. This has been the case since the Supreme Court ruled the education finance adopted over the last few years, the “block funding”, as unconstitutional a couple months ago. That has changed the budgetary outlook.

On Thursday, the Kansas Senate ran an amended version of HB 2067, a tax plan that was largely similar to what the House nearly voted on last week. The bill did not pass in the Senate, with a final vote of 18 in favor and 22 voting no.

Complete repeal of the Brownback tax cuts from 2012 is also on the table. It’s a very active discussion on how to get the state out of the downward spiral. Spending cuts have been made repeatedly over the last few years, but the borrow and bankrupt plan has not been working. We need continued reform.

 

Port Authority

Last week, a bill that helps our Leavenworth economic development, now S Sub for HB2132, had its contents stripped out in the Senate Ways & Means committee and new content was put in that would expand gaming at horse and dog tracks in Kansas. This technique is often used at this time in the session, but fortunately or unfortunately, they used our bill as the vehicle for expanded gaming. The gaming bill will probably not pass out of the Legislature because it failed on the House committee side after this happened to our port authority bill. The Senate has passed the bill on the floor and will now be put into a conference committee report for final approval and passage by the governor. It’s interesting learning how the sausage is made…

 

Lynyrd Skynyrd Tribute concert for Leavenworth Local VFW Post 56

I was honored to be emcee on Saturday night for this fundraiser event featuring Edge of Forever, the number one Lynyrd Skynyrd tribute band with members from our own Leavenworth. The event raised thousands for our local veterans relief fund and helped raise awareness of the assistance sometimes needed that our local VFW Post 56 provides.

Edge.png  Edge2.png  Edge3.png  Edge4.png

 

Leavenworth Farmers Market

The Farmers Market is now open at Haymarket Square in downtown Leavenworth.  I spent Saturday morning enjoying all the variety of vegetables they have to offer.  I was amazed to see radishes the size of golf balls and sweet strawberries.   Farmers Market is open Wednesdays from 3pm-6pm and Saturdays from 7am-12.

Farm1.png  Farm2.png  Farm3.png  Farm4.png
 

Local Elections

Anyone interested in running for local office in Kansas – take note! The filing deadline for candidacy is June 1st, 2017. If you would like to file, or know someone who would, please find all the details you need and the filing paperwork here


Thanks for reading and be sure to check out my facebook page at http://www.facebook.com/pittman41 or follow me on twitter @votepittman.

CONTACT ME

I want to hear from you. It continues to be a special honor to serve as your state representative and look forward to any input on the various issues facing state government.

Please feel free to contact me with your comments and questions. My office address is Room 559-S, 300 SW 10th, Topeka, KS 66612. You can reach me at (785) 296-7522 or call the legislative hotline at 1-800-432-3924 to leave a message for me. Additionally, you can email me at jeff@votepittman.com. Some of the action is streaming and you can follow the legislative session online at www.kslegislature.org


For Leavenworth,
Rep. Jeff Pittman