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Minutes for HB2844 - Committee on Taxation
Short Title
Modifying income tax rates for individuals, increasing the standard deduction and the Kansas personal exemption, increasing the income limit for an income tax subtraction modification for social security income, increasing the extent of property tax exemption for residential property from the statewide school levy, decreasing the privilege tax normal tax rate, abolishing the local ad valorem tax reduction fund and the county and city revenue sharing fund and decreasing the rate of ad valorem tax imposed by a school district.
Minutes Content for Wed, Mar 20, 2024
Chairperson Smith opened the hearing for HB2844.
Adam Siebers provided an overview for HB2844 that modifies income tax rates for individuals, increases the standard deduction and the Kansas personal exemption, increasing the income limit for an income tax subtraction modification for social security income, increasing the extent of property tax exemption for residential property from the statewide school levy, decreasing the privilege tax normal tax rate, abolishing the local ad valorem tax reduction fund and the county and city revenue sharing fund and decreasing the rate of ad valorem tax imposed by a school district. (Attachment 12) Mr. Siebers stood for questions from Committee members.
Committee discussion ensued
Kathleen Smith, Kansas Department of Revenue, provided an overview on the fiscal note for HB2844 stating the Department of Revenue estimates the bill would decrease state revenues by $412.0 million in FY2025 including reducing the State General Fund by an estimated $265.0 million and reducing the State School District Finance Fund revenues by an estimated $147.0 million. Ms. Smith stood for questions from Committee members.
Proponents:
Dave Trabert, Kansas Policy Institute, testified as a proponent for HB2844 via WebEx noting states with lower income taxes have superior economic growth and desperately needed in Kansas. Private sector job growth in Kansas was ranked Number 44 between 1998 and 2022. December, 2023 private-sector jobs were just 0.3 percent higher than the year before which is far below the national average. Kansas can easily afford the tax relief in HB2844 and may cost less that the flat tax in SB539 because the Social Security exemption is phased in and does not have the food sales tax accelerator. (Attachment 13)
Eric Stafford, Kansas Chamber, testified as a proponent for HB2844 that is focused on providing income tax relief for Kansas taxpayers. HB2844 makes Kansas more competitive and attractive for economic investment, but cannot ignore the steps of what the surrounding states have taken that have lowered their top rates than Kansas due to recent tax relief. (Attachment 14)
John Donley, speaking on behalf of the Kansas Farm Bureau, testified as a proponent for HB2844 noting there has been significant pressure over the years to rely more and more on property tax for state and local government revenue. HB2844 is a step in the right direction to begin reducing some of the property tax burden for Kansas taxpayers. (Attachment 15)
Aaron Popelka, Kansas Livestock Association, testified as a proponent for HB2844 that will provide meaningful property tax relief across all classes of taxable property, as well as provide income tax relief. He noted the Kansas Livestock Association for HB2844 is primarily focused on the broad-based property tax relief the bill provides through the reduction of the statewide mill levy. (Attachment 16)
The proponent conferees stood for question from Committee members.
Written testimony was submitted by the following as proponents for HB2844:
Alex Orel, Senior Vice President, Government Relations, Kansas Bankers Association, (Attachment 17)
Mark Tomb, Vice President of Governmental Affairs, Kansas Association of Realtors, (Attachment 18)
Dan Murray, Kansas State Director, National Federation of Independent Business (NFIB), (Attachment 19)
Neutral:
Donna K. Ginther, Professor of Economics, University of Kansas, testified as neutral to HB2844. Ms. Ginther noted her testimony was neutral because the fiscal note is not well understood but did address each component of HB2844. (Attachment 20)
Timothy Graham, Kansas National Education Association, testified as neutral to HB2844 noting they are not opposed to property tax relief but concerned that future legislatures may not be dedicated to backfilling the revenue that would be lost by reduction of the statewide mill levy from 20 mills to 18 mills. (Attachment 21)
The neutral conferees stood for questions from Committee members.
Written testimony was submitted as neutral to HB2844 by the following:
Jay Hall, Deputy Director and General Counsel, Kansas Association of Counties, (Attachment 22)
Leah Fliter, Assistant Executive Director of Advocacy, Kansas Association of School Boards, (Attachment 23)
Opponent:
Written testimony was submitted as an opponent to HB2844 by John Lee on behalf of Tax Simple Center (Attachment 24)
Chairperson Smith closed the hearing for HB2844 and adjourned the meeting.
