Kansans Eagerly Await Gov. Kelly’s Signature as House Unanimously Passes Dual-Rate Income Tax Cut

The wait is almost over for Kansans who have patiently endured years of no broad-based tax relief. In their final act of the regular 2023-24 legislative session, a bipartisan cadre of Kansas lawmakers overwhelmingly approved a historic tax package that slashes income and property tax rates and eliminates one of the state’s three income tax brackets, along with an assortment of other long-overdue tax cuts that would return a total of $460 million to Kansas families and small businesses.

States across the country, including every one of the states on the Kansas border, have spent the last few years competing to flatten and lower their income tax rates. But as the race to cut income taxes heats up, Kansas has languished far behind her peers. Since the beginning of last year, Gov. Kelly vetoed 25 different tax cuts despite Kansas having nearly $5 billion in surplus revenue, most of which is sitting untouched in the “rainy day fund.”

With the passage of HB 2036, however, Kansas is ready to make up for years of lost time. The compromise bill is a remarkable achievement for Kansas, one of just a few states that has not enacted any income tax relief since 2020. In the wee hours of Saturday morning after a marathon 12-hour floor session, lawmakers on both sides of the aisle came together to support income and property tax cuts for low- and middle-income Kansans, emphasizing their appetite for relief with a unanimous vote in the House.

Most families and small businesses in Kansas are subject to the top income tax rate of 5.7%, which is paid on all income over $30,000. Once Gov. Kelly signs the bipartisan tax bill, that rate will be reduced to 5.55%. The other income tax rate of 5.25% will come down to 5.15%, while the third bracket is eliminated entirely. At the same time, the standard deduction will increase dramatically, benefitting the lowest-income taxpayers and ensuring that every Kansan gets a tax cut.

The compromise bill is also a win for homeowners. The 20-mil statewide property tax rate will come down to 19.5 mils. On top of that rate reduction, the residential property tax exemption will more than double from $40,000 to $100,000. Speaker Dan Hawkins recognizes that true property tax relief comes in the form of broad-based, permanent rate cuts for property owners, rather than subsidizing local government budgets using state tax dollars.

After years of failed tax cuts, it’s clear that Kansans are desperate for relief. Gov. Kelly must sign HB 2036 at the first opportunity. As someone who campaigned on being “middle-of-the-road,” this bill is the perfect chance for Gov. Kelly to prove her willingness to meet in the middle, just as her Democrat compatriots in the legislature did when they voted to send this bill to her desk.

Gov. Kelly has already proposed tax relief equal to $436 million per year. Clocking in at $469 million in the out-years, HB 2036 is an affordable and sustainable compromise that the governor should eagerly embrace.

Thanks to the hard work of Senate President Ty Masterson, Speaker Dan Hawkins, Majority Leader Chris Croft, Sen. Caryn Tyson, Rep. Adam Smith, Rep. Francis Awerkamp, Rep. Brian Bergkamp, Rep. Stephen Owens, and countless others who fought for tax relief every step of the way, Kansans are only one signature away from a major tax cut that will let families keep more of their hard-earned money and make the state economy more competitive for years to come.