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Minutes for HB2318 - Committee on Taxation
Short Title
Providing that future personal and corporate income tax rate decreases be contingent on exceeding tax receipt revenues.
Minutes Content for Mon, Mar 3, 2025
Chairperson Smith opened the hearing for HB2318.
Adam Siebers, Office of Revisor of Statutes, provided an overview for HB2318 that is contingent on the state receiving exceeded revenue and the bill will provide for a possible decrease in income tax rates. (Attachment 1) Mr. Siebers stood for questions from Committee members.
Eddie Penner, Legislative Research, provided an overview on the fiscal note for HB2318 that provides future income tax rate decreases based on exceeding revenue. Mr. Penner stood for questions from Committee members.
Proponents:
Eric Stafford, Government Affairs for the Kansas Chamber, testified as a proponent for HB2318 which is a income tax rate reduction modeled off of North Carolina and West Virginia that have reduced their income taxes through growth in state receipts. The bill provides transparency and long-term budget planning while preventing revenue shortfalls. HB2318 is a responsible and reasonable path toward improving the state of Kansas' competitive standing as a state.(Attachment 2)
Tanner Tempel, Deputy State Director, Americans for Prosperity, Kansas, testified as a proponent for HB2318 stating the bill establishes a way to reduce Kansas income tax rates based on revenue performance with reductions continuing until rates reach a specified minimum. The bill is a commitment to fiscal responsibility by connecting income tax reductions to actual revenue growth exceeding inflation adjusted levels and also to lower income tax rates. Mr. Tempel urged the Committee to support HB2318 to help build Kansas to have a strong more resilient economy. (Attachment 3)
Alex Orel, Senior Vice President Government Relations, Kansas Bankers Association, testified as a proponent for HB2318 stating they would like to submit a proposed amendment noting Kansas banks are not subject to the Kansas corporate income tax but subject to their own income tax which is called the Kansas privilege tax. The privilege tax is not part of the current proposal. Mr. Orel stated he is unsure of the best way to draft the proposed amendment since privilege tax is a different rate which is two tiered and trust, savings and loans are treated in another way.(Attachment 4)
Dennis Hull, Americans for Tax Reform, testified as a proponent for HB2318 that would implement responsible revenue triggers that will reduce the state income tax rate over time. Mr Hall noted many states are pulling ahead of Kansas on competitive tax policy. Meaningful income tax relief and spending restraint makes the tax cuts possible. (Attachment 5)
The conferees stood for questions from Committee members.
Written only proponent testimony for HB2318 was submitted by the following:
Dave Trabert, Kansas Policy Institute, (Attachment 6)
Daniel Murray, National Federation of Independent Business, (Attachment 7)
Randy Stookey, KARA, KGFA, Renew Kansas, (Attachment 8)
Opponents:
Nathan Kessler, Kansas Action for Children, testified as an opponent for HB2318 stating the move from a graduated rate structure to a flat tax would jeopardize the financial health of the state while providing the largest tax cut to high income individuals and corporations to the detriment of the working class and middle class Kansans. Buying down the income tax rate just because tax collections came in higher than expected is not a good approach to budgeting and could jeopardize the fiscal health of the state. Rather than taking this inefficient route for delivering relief, the Committee should consider alternatives like a child tax credit, a sales tax exemption for diapers, feminine and hygiene products or putting renters back in the Homestead Credit Act. (Attachment 9)
Donna Ginther, Professor of Economics, University of Kansas, testified as an opponent for HB2318 stating the bill makes the state vulnerable to unanticipated surges in revenue and does not protect from an economic downturn. HB2318 will make it difficult for the state to provide services during periods of weak economic performance. (Attachment 10)
Leah Fliter, Kansas Association of School Boards, testified as an opponent for HB2318 asked the Committee to consider a more balanced mix of cuts that spread across the three-legged stool that we have talked about. (Attachment 11)
The conferees stood for questions from Committee members.
Written opponent testimony for HB2318 was submitted by the following:
Timothy Graham, Kansas NEA, (Attachment 12)
Denise Sultz, Kansas PTA President, (Attachment 13)
Chairperson Smith closed the hearing for HB2318.
Chairperson Smith informed the Committee there will be a hearing tomorrow for HB2396 and will take action on the bill March 5, 2025 noting there are several amendments for the bill.
Chairperson Smith adjourned the meeting.
