TOPEKA, Kan. (AP) - Republicans in the Kansas Legislature worked out the details Wednesday of proposals aimed at decreasing local property tax levies and potentially eliminating exemptions to the state’s sales tax.
GOP negotiators for the House and Senate also settled on the final language for changes in a program for providing corporate-funded scholarships to private schools for poor children. In addition, they agreed to preserve an income tax credit for poor families for the sales tax they pay on food.
Differences on the policy issues had hindered passage of a tax proposal to raise sales, cigarette and business taxes to close a state budget shortfall and avert deep spending cuts.
The House approved the measure on a 66-49 vote Wednesday night, but the Senate adjourned just after midnight without taking it up.
Here is a look at the measures.
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LOCAL PROPERTY TAXES
Republican Sen. Jake LaTurner, of Pittsburg, won approval in his chamber for a proposal to require a public vote before cities and counties could spend an increase in property tax revenues greater than inflation, as measured by the consumer price index. Because property values often rise year-to-year, voters could force property tax levies down by refusing to allow local officials to spend the windfall from higher property values.
Cities and counties fear being handcuffed in funding services or responding to emergencies.
The requirement would start in 2018. Negotiators agreed to allow cities and counties to avoid a public vote under some circumstances, such as if they were spending the additional revenues on road projects or infrastructure for schools and hospitals.
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SALES TAX EXEMPTIONS
Conservative GOP senators argued that the state wouldn’t have to increase its sales tax rate to close the budget shortfall if it eliminated some of the dozens of exemptions to the tax. But efforts to do that have repeatedly failed in the past, as groups and industries lobbied to keep them.
The negotiators agreed on a proposal to eliminate most exemptions in 2020 while preserving exemptions for business-to-business transactions. Negotiators agreed to preserve more exemptions, including those for gasoline, residential water and utility bills and goods purchased by nonprofit hospitals and blood banks.
A special commission would review all exemptions and report next year on which ones could be eliminated.
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PRIVATE SCHOOL SCHOLARSHIPS
Legislators last year authorized up to $10 million a year in corporate income tax credits for businesses that contribute money for private school scholarships for at-risk students. Their contributions flow through scholarship-granting groups.
The Senate approved a proposal to allow the funds to flow directly to schools, rather than to parents and to increase the number of students eligible for scholarships, though not the amount of tax credits available.
Critics worried about the funds going directly to religious schools, or going to unaccredited private or home schools. The negotiators agreed on language requiring the scholarships to be limited to students at schools accredited by the state or a private group.
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FOOD SALES TAX CREDIT
The state provides a $125-per-person income tax credit for low-income families to offset the sales tax on food, though it can’t result in a refund if a family ultimately owes no income tax.
With legislators discussing proposals to lower the state’s 6.15 percent sales tax on food, some Republicans thought the credit could be eliminated, raising $15 million a year. But the negotiators agreed to preserve it.
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Online:
Kansas Legislature: https://www.kslegislature.org
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