Kansas is phasing out the nation’s second-highest state sales tax on groceries, but Republican lawmakers won’t lower consumers’ costs until after Democratic Gov. Laura Kelly’s reelection bid in November.
Kelly’s most conspicuous legislative endeavor this year is repealing the 6.5 percent tax, and she and fellow Democrats have been running a public campaign for weeks to persuade the GOP-controlled Legislature to repeal the entire tax on July 1. The Republican plan calls for a three-year phase-out of the tax, with rates falling to 4% in January, 2% in 2024, and zero in 2025.
The Republican plan was approved by the Senate 39-0 on Wednesday, and the House is expected to vote on it on Thursday. With lawmakers reluctant to vote against any kind of a tax cut on final action, Kelly, who has made a point of not announcing what she would do, seemed expected to get the bill.
Election-year politics dominate the discussion. Kelly presents herself as a bipartisan problem-solver, and her proposed tax cut would begin to lower people’s grocery expenses before the November election. Republicans are responding to her idea by using the same rhetoric she used during her 2018 campaign against her.
Tonight’s action was a win for every single Kansan — we #AxedtheFoodTax. I'm ready to sign this bipartisan bill into law. We're going to save Kansans money and get them much-needed financial relief. pic.twitter.com/F8nH0THHEV
— Governor Laura Kelly (@GovLauraKelly) April 29, 2022
Kelly and her Democratic colleagues say that customers want as much assistance as possible as soon as feasible. That was true for Ryan Gay, a 51-year-old firefighter who is skeptical that the state will do anything more than what “looks nice on paper” on Thursday at a Topeka grocery store.
“Isn’t it always about the now?” “he stated, “Just get rid of it now, and I’ll save money over time.”
Kelly claims she is attempting to assist families dealing with the highest level of inflation in the United States since the 1980s. She promised to abolish the tax in her first campaign for governor in 2018, but she placed it on the back burner in favor of repairing the state’s finances.
Republicans argue that they want a seamless implementation of a potentially complicated tax cut and that abolishing the tax won’t put the budget in jeopardy.
Only thirteen states levy a sales tax on groceries. The only state with a lower rate than Kansas is Mississippi, which has a rate of 7%.
Over three years, the GOP plan would save taxpayers $740 million, and a family spending $200 per week on food would save $208 in 2023. Under Kelly’s plan, the same household would save $676 in 2023, and taxpayers would save up to $1.4 billion over three years.
Kansas has a lot of money. In the nearly five years since GOP Gov. Sam Brownback overturned most of an income tax-cutting experiment, it has had surpluses in tax revenues for all but three months. Even among Republicans, that experiment was followed by recurring budget problems, and it became nationally famous.
Republicans say that the state should delay implementing the tax relief because it will be difficult for grocers to implement. The tax break would be limited to unprepared goods rather than most prepared foods. Caryn Tyson, the chair of the Senate tax committee and a Republican from eastern Kansas said making the change by July 1 is unrealistic.
During her chamber’s debate, Tyson stated, “Vendors would not be able to implement it in the actual period.”
The state Department of Revenue, as well as certain suppliers and vendor associations, deny that the change would take months to implement. Some customers are also suspicious that Kansas requires months of planning ahead of time.
“They could pull the plug on it overnight,” said Steve Yeager, a 75-year-old retiree who admits he isn’t a fan of Kelly in general and “no supporter of any Democrat.”
Kelly’s insistence on a quick halt to the sales tax on food has irked some Republicans, who included a plan to phase it out in a tax bill in 2019 that she rejected. That plan featured tax cuts for the wealthy, which she and other Democrats vehemently opposed.
“So don’t tell me this is just a political stall,” Masterson said of the GOP’s grocery sales tax proposal.
Republicans also say that Congress should be more cautious than Kelly desires since no one knows what the future holds, and they are concerned that inflation may eventually suffocate economic growth.
They’re now using the financial troubles that followed Brownback’s tax experiment as a warning. Kelly made a point of criticizing Brownback’s fiscal legacy during her 2018 campaign.
“One of the things she argues is that it went too far, too quickly,” said northern Kansas Republican House Speaker Pro-Teem Blaine Finch.