Schmidt and Kelly tell intriguing campaign stories about Kansas sales tax rate

TOPEKA — Democrat Laura Kelly and Republican Derek Schmidt’s views on the state’s extraordinarily high sales tax on groceries have become rich fodder in their gubernatorial campaigns.

Schmidt’s campaign insisted the GOP attorney general beat Kelly to the fist in 2021 with a proposal to eliminate or drastically reduce the 6.5% state sales tax on food, but Kelly proposed reform when he ran for governor in 2018.

Kelly, hatchet in hand, has been dedicated this year to building public interest in sales tax reform. So far, Republicans in the Legislature have strongly weaponized Kelly’s plan to end the state’s share of the food sales tax on July 1.

Both candidates declared victory by signing a bipartisan bill scrapping chunks of the state sales tax on groceries until they win in January 2025. The change is ultimately expected to cost the state treasury $500. million dollars per year and has been made possible by the development of an unprecedented system. budget surplus.

“When Kansans needed it most, we were able to bring Democrats and Republicans together to eliminate the grocery tax from our state,” Kelly said. “Because we have saved for our collective future, we can now responsibly reduce food tax — while increasing funding for Kansas schools, roads, and law enforcement.

Under the new law, Kansas’ rate on groceries would drop to 4% in 2023, 2% in 2024 and zero in 2025.

Schmidt, the Republican Party’s likely gubernatorial nominee, said Kelly could have dealt with the nation’s highest food sales tax sooner had she signed a bill in 2019 that included special interest tax adjustments. and a phased reduction in the state sales tax on groceries. If signed three years ago, which Kelly says would have been fiscally irresponsible, the state’s grocery tax would be 2.9% and heading toward zero by 2023.

Schmidt said a closer relationship between Governor and Speaker of the House Ron Ryckman, R-Olathe, and Senate Speaker Ty Masterson, R-Andover, was needed to move a reform bill quickly. sales tax. GOP leaders in the House and Senate have decided not to vote on the stepped sales tax bill until three months after the start of the annual legislative session.

“I’m going to let you in on a little secret,” Schmidt told Republicans at a rally in Linn County. “The way you do it is to sit down with the leaders of the Legislative Assembly and say, ‘I’m going to do this. I’ll round up the votes. What’s the game plan?’ I’ll tell you what you don’t – grab a hatchet and go from produce aisle to produce aisle at grocery stores across the state.

Those old Senate votes

Schmidt’s campaign says Kelly was in the Kansas Senate when she voted in 2010 to avoid further state budget cuts – six rounds of slash-and-burn actions cut nearly $1 billion in spending – temporarily increasing the overall state sales tax from 5.3% to 6.3%. After the third year of this plan signed into law by Democratic Gov. Mark Parkinson, the state sales tax was to drop to 5.7%, with a portion of the revenue going to highway programs.

Schmidt, representing independence in the Kansas Senate at the time, voted against this sales tax legislation.

Emma O’Brien, spokeswoman for the Kansas Democratic Party, said a careful review of the legislative history of the statewide sales tax showed that Schmidt voted in 2002 to raise the rate of 4.9% to 5.3%. He voted to keep the 5.3% sales tax until 2006, she said, but it remained at that level until it was raised again in 2010.

“While Derek Schmidt has offered the Kansans nothing more than empty words, Governor Kelly implemented to ensure that the Kansans get much-needed financial assistance,” O’Brien said. “Schmidt can claim to support the elimination of food sales tax until he’s blue in the face, but the Kansans know the truth. He voted for hiking food sales tax as a state senator, and he refused to publicly support the governor Kellythe plan to chop the fWell tax. It’s all hat, no cattle.

Parkinson declined to run for a full term as governor in 2010 and handed over the post in 2011 to Sam Brownback, a former U.S. senator who easily won the gubernatorial election. Brownback signed a controversial bill in 2012 that aggressively cut state income tax as part of his goal to end that tax in Kansas. The resulting state government revenue shortfall was not made up for by budget cuts, so the governor struck a deal to block the promised reduction in the state’s sales tax to $5. .7% in 2013.

Instead, Brownback moved the state rate to 6.15% in 2013 and 6.5% in 2015 to help address huge state budget deficits. The legislature ended Brownback’s experiment on the end of the income tax in 2017.

Christopher Reeves, who served on the Kansas Democratic National Committee from 2016 to 2021, said Kelly constantly sought to reduce the state’s sales tax on groceries in a way that didn’t hurt finances. overall state. The $3 billion budget surplus offered the opportunity to instantly eliminate the state sales tax on groceries, he said, but GOP leaders did not want the preference of Kelly prevails ahead of the November election.

“It’s a very toxic and dangerous strategy,” Reeves said.

House Majority Leader Dan Hawkins, a Republican from Wichita, defended the Legislature’s three-year approach to phased food sales tax cuts. He said there were real threats of broader economic downturns that may require a review of the food sales tax rate.

“Bad things can happen,” he said. “You still have to cover maybe just a small offer from the Tory side.”

Swollen economic veins

Schmidt criticized President Joe Biden — not President Donald Trump — for responding to the COVID-19 pandemic and associated economic challenges with federal spending increases aimed at supporting families and businesses. Biden signed the $1.9 trillion US bailout in March 2021 and the $1.2 trillion Infrastructure Investment and Jobs Act in November. Biden’s US bailout included $1,400 cash payments to Americans.

In April, Kelly proposed an amendment to the state budget allocating $460 million from the state treasury surplus for one-time $250 tax refunds to all Kansans filing 2020 tax returns. The GOP-led legislature rejected his recommendation.

Trump, who was defeated by Biden for reelection in November 2020, signed a series of bills in 2020 in response to COVID-19. He made $3.7 billion available for food, health, tax and unemployment assistance with the Coronavirus Response for Families Act. This was followed by the $2.2 trillion CARES Act, the largest economic stimulus package in US history.

In 2020, Trump signed legislation giving Americans stimulus checks of $1,200 per person and a second round of direct payments of $600 per person. He claimed the second installment was a pittance and urged Congress to allocate $2,000 per person in economic aid.

“The amount of money that Congress has printed and pumped into the economic veins of the nation is not sustainable,” Schmidt said. “The reality is we need more conservative leadership that understands the value of a dollar that doesn’t think the way you make people happy is to just cover them with their own money.”

O’Brien, of the state Democratic Party, said Schmidt had shown contempt for Kansas taxpayers through policies he supported and “sham trials” he pursued as a prosecutor general.

“Promise he won’t work to put money back in the pockets of the Kansans after spending years alongside Sam Brownback as he brought down the state’s economy and stalled the bill for families in the Kansas is showing how out of touch it is with what Kansans need and want,” she said.

CJ Grover, spokesman for Schmidt’s campaign, said Kansas voters should appreciate that inflation in the United States triggered by government spending was “pushing state tax collections in Kansas and most other states to new heights each month.