24 Jun 2024 Kansas Capitol Review – Special Session
On June 18, in response to an action by Governor Laura Kelly, the Kansas legislature convened a one-day Special Session where two matters were debated. The first was a comprehensive tax relief bill. The second item was approval of a Sales Tax and Revenue (STAR) bonding package intended to incentivize the Kansas City Chiefs and Kansas City Royals sports franchises to come to Kansas City, Kan. Both bills were passed, and the governor has indicated she will sign the bills into law.
COMPREHENSIVE TAX RELIEF – Senate Bill 1: The House and Senate voted overwhelmingly to pass Senate Bill 1 which will provide an estimated $1.2 billion in tax relief over the next three years. The plan was presented as a compromise plan between legislative leadership and Governor Laura Kelly. According to the Governor, the plan provides tax relief while preserving the state’s ability to fully fund public schools, roads and bridges, and state water plan. The plan collapses the state’s current three individual income tax brackets down to two brackets and provides various income tax relief for individuals, including a complete removal of income tax on social security income. The plan also increases the residential property tax exemption on the first $75,000 in home valuation (up from $40,000 currently). However, the bill did not include a reduction in the state property tax mill levy, which was a provision that had been included in previous tax bills and would have provided broader property tax relief to other classes of properties. Conservatives that criticized the bill for not providing sufficient tax relief to buy-down the state’s large ending reserve balances are likely to bring additional legislation next year.
STAR BOND INCENTIVE PACKAGE – House Bill 2001: This bill was a major economic incentive package specially designed to authorize the secretary of commerce to enter into agreements with major professional sports franchises to establish STAR bond projects for a major professional sports complex in Kansas – likely placed in Wyandotte County. Any specific project would need to be approved by the state’s legislative coordinating council for the fiscal year ending June 30, 2026. Following a quick informational hearing on Monday, both the House and Senate passed the bill with strong votes. It is anticipated that the Missouri legislature will counter with a similar incentive package to retain the sports franchises in their state.