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Legislative Update from Brenda Dietrich

At the Capitol

 
Adjournment
 
The Kansas Legislature finally adjourned on Saturday, June 10, 2017 after a very long, but productive session. While there will always be an opportunity to improve upon our state, significant strides were made to regain fiscal stability, strengthen our system of education and eliminate the need for many negative one-time fixes and budget tricks to get from one year to the next.

Tax Plan - Fiscal Stability

 
SB 30, the Tax plan crafted and passed by a bipartisan coalition of legislators will begin the long process of restoration for the State of Kansas. The bill partially repeals Governor Brownback’s tax plan put into place in 2012, and, most importantly provides tax relief by restoring mortgage deductions, medical deductions, and the child care tax credit. Voting to restore taxes was a very difficult decision for the House and the Senate, but it was necessary to get our state back on a sustainable path.
 
As you are likely aware the House and Senate were forced to override the veto of the Governor in order to adopt a tax policy that will fund our budget and allow us to pay our bills on time, cover the increases to education, and fund KPERS. I voted Yes. Some details of the new Tax Policy are shared below:

Medical Expenses – The bill would allow a 50.0 percent deduction for medical expenses for 2018 and the amount would increase to 75.0 percent in 2019 and 100.0 percent in 2020.  Under Governor Brownback, the medical expense deduction was repealed in 2015. This will allow seniors living in nursing homes and those with significant medical expenses to again deduct those costs from their taxes.
 
Mortgage Interest and Property Taxes – The bill would increase itemized deductions for mortgage interest and property taxes paid, currently set at 50.0 percent of the federal allowable amounts, to 75.00 percent for 2019 and 100.00 percent in 2020. This will help encourage homeownership and first-time homebuyers by again allowing homeowners to deduct these costs from their taxes.
 
Child and Dependent Tax Care Credit – The bill would reestablish the credit and it would be set at 12.50 percent of the allowable federal amount for 2018, 18.75 percent for 2019 and 25.00 percent for 2020 and thereafter.  25.00 percent is the rate that had been utilized prior to the repeal in 2012. This tax credit will help low-income working Kansans find affordable child care so they can remain in the workforce.
 
Low-Income Exclusion Threshold – The bill would reduce the low-income exclusion threshold from $12,500 to $5,000 for married filers and from $5,000 to $2,500 for single filers. 
 
Included below are the individual income tax brackets, married filing jointly. The tax rates in the New Tax Law are lower than income tax rates from 1992 – 2012.
 
Taxable Income Tax Years
1992 – 2012
Current
Law
New Tax Year 2017 New Tax Year 2018
$0 – 30,000 3.50% 2.70% 2.90% 3.10%
$30,001 - $60,000 6.25% 4.60% 4.90% 5.25%
 
$60,001
and above
6.45% 4.60% 5.20% 5.70%
 
 
 
Scenarios
 
Family of Four
$100,000 Income Family would pay $550 more than current law, but would pay just $250 more with the Child Care Tax Credit.  Family would pay $620 less than they did in 2012.
(22,000) Standard Deduction
$78,000 of Taxable Income
First $30,000 taxed at 3.1%
Next $30,000 taxed at 5.25%
Final $18,000 taxed at 5.7%
 
Family of Four
$80,000 Income Family would pay $350 more than current law, but would pay just $50 more with the Child Care Tax Credit.  Family would pay $439 less than they did in 2012.
(16,500) Standard Deduction
$63,500 of Taxable Income
First $30,000 taxed at 3.1%
Next $30,000 taxed at 5.25%
Final $3,500 taxed at 5.7%
 
Family of Four
$60,000 Income Family would pay $207.75 more than current law, but would pay just $92.25 less with the Child Care Tax Credit.  Family would pay $348.75 less than they did in 2012.
(16,500) Standard Deduction
$43,500 of Taxable Income
First $30,000 taxed at 3.1%
Next $13,500 taxed at 5.25%
 
 
Single Parent, Two Children
$25,000 Income Family would pay $43 more than current law, but with the Child Care Tax Credit would pay $290.25 less.  Family would pay $148 less than they did in 2012.
(7,500) Standard Deduction
$17,500 of Taxable Income
(6,750) Deductions
$10,750 taxed at 3.1%
 
 
 
Many of you have asked what the state has done to reduce spending since the income tax reductions of 2012.  There were many actions taken to reduce government spending and I have listed some of the more notable ones below:
  • Spending for general government purposes (which excludes Medicaid, Education and KPERS) has been reduced by over $140 million from $1.02 billion in 2012 to $869 million in 2017;
  • The budget has been cut 9 times, many through allotments (mid-year reductions), the past 5 years;
  • The Legislature has eliminated nearly 3,000 full-time positions from 2012 to 2017;
  • The Legislature has eliminated numerous state agencies including the Kansas Technology Enterprise Corporation, Kansas Inc., Kansas Parole Board, Animal Health Department, State Conservation Commission, Kansas Arts Commission as well as the Kansas Bioscience Authority;  
  • SGF receipts have fallen by $265 million from $6.245 billion in 2012 to $5.980 billion in 2017; and
  • Entitlement expenditures (Human Services Caseloads) increased approximately $144 million in this time frame.

Education - New Formula

 
The new school finance formula, which is Senate Bill 19, was finalized in a Conference Committee (negotiated between the House and the Senate).  It then passed the House 67-55 and the Senate 23-17. I voted YES.  The bill was delivered to the governor for his consideration June 9th.  He signed the bill on Thursday, June 15, 2017. There is a sense of urgency on the next steps because the Supreme Court set a deadline of June 30th to craft a new formula and school districts are not able to complete their statutorily required budget process this summer without a new formula being approved by the Courts. This new formula is similar to the previous funding formula which was structured using Base State Aid Per Pupil and “weightings” that recognize the unique student issues impacting the 286 diverse school districts all across Kansas. The new formula adds a net $488 million to state education funding over the next two years, then uses the CPI for subsequent years. All school districts in Shawnee County will see an increase in funding for their schools.
 Some highlights in this new plan:
  1. ) Funds all-day kindergarten
  2. ) Increases the Base State Aid Per Pupil to $4,006 next year and $4,128 in 2018-2019
  3. ) Provides $2 million per year for early childhood at-risk programs
  4. ) Increases funding for all at-risk students
  5. ) Increases funding for Special Education
  6. ) Provides new money for teacher mentoring and professional development

Budget Reform


We had many opportunities, once the tax plan was finalized, to discuss different components of the state’s budget.  The House (Appropriations) and Senate (Ways and Means) negotiators worked diligently to find a compromise between the budgets passed by each House.  The final compromise, Senate Substitute for House Bill 2002, was debated and approved on Saturday, June 13th.  The budget is not perfect, but it is a great step in the right direction.  We are no longer deficit spending and it acknowledges and funds some of our basic needs.  This budget will continue to shore up the retirement system, add funds for state mental hospitals (20 + beds at Osawatomie), restore funds for the Senior Care Act, begins to fund the State Water Plan, provides raises between 2.5% -5% for most state employees, adds dollars to Safety Net Clinics, Rural Health, Department of Corrections, and provides an ending balance in 2018 and 2019.  The budget passed the House 88-27 and the Senate, 27-11. I voted YES. It is awaiting the governor’s signature.
 
Once the budget was passed, we adjourned until Sine Die (last official day of the session) on June 26th. After passing the new school finance formula, restructuring the tax code, and passing a budget that funds our government responsibly Moody’s credit rating service moved Kansas’s credit outlook from negative to stable.  That was welcome news.

Sad News





Patsy is standing behind Brenda in the above picture

On Wednesday, June 7th, one of my fellow freshmen legislators unexpectedly passed away in her sleep. Rep. Patsy Terrell sat on my side of the House floor…two rows in front of me…and her office was directly across the hall from my office in the Capitol. I saw Patsy every day and marveled at her love of vintage jewelry, purses, bright clothing, art, and all things sparkly! Patsy was from Hutchinson and was new to the political process, but she was a natural.  She loved people and had the heart and soul of a servant. In her honor, we all wore colorful clothing, sparkly brooches, and brought flowers to cover her desk on the day after her passing.  She will be deeply missed.

Contact Me

During the off session time of year, the quickest way to reach me is by email of cell phone (785-221-3853).

Brenda.Dietrich@house.ks.gov or dietrbre@gmail.com

Thank you for the opportunity to serve!
 
Representative Brenda S. Dietrich
Room 166-W State Capitol Building
300 SW 10th St., Topeka, KS 66612
Phone: 785-296-7648
Email:  Brenda.Dietrich@House.ks.gov

If you or your friends would like to receive my Legislative up-dates, you can click here or visit my website at http://kansansforbrenda.com, and enter your email address in the space provided on the right side.

Contact Brenda

Room 166-W
300 SW 10th Street
Topeka, Kansas 66610
Phone: 785 296-7648
Email Brenda


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