Kansas Democratic Gov. Kelly vetoes Republican-backed tax cut bill over ‘bad’ provisions

Kansans will officially see no tax cuts this year after Democratic Gov. Laura Kelly rejected a bill that cobbled together more than 20 tax policies including a tax credit for anti-abortion pregnancy centers and businesses, like health clubs, competing with public accommodations.

In a veto message issued Friday, Kelly criticized the bill, SB 8, as prioritizing “tax breaks for big businesses over everyday Kansans and would harm the budgets of local governments and schools.”

The legislation would have cost the state about $80 million annually if it had become law.

“While Senate Bill 8 includes tax cuts and personal property tax reforms that I support, by bundling 12 bills together the legislature has made it impossible to sort out the bad from the good,” Kelly said in a statement.

Speaking to reporters last month, Kelly called the bill the “Genesis tax break,” referring to the owners of Genesis health clubs that have spent years lobbying the Legislature for tax breaks for their facilities. The bill included a policy granting a tax break to a set of businesses, including health clubs, if the government begins competing with them.

“I’m not going to do that,” Kelly said.

The bill is the second tax cut package the Democratic governor has rejected this year. Last month she vetoed a bill that combined some of her tax priorities with a 5.25% flat tax. Lawmakers failed to override Kelly’s veto on the flat tax and have left Topeka for the year, meaning they won’t have the opportunity to attempt to override Kelly’s latest veto.

The Kelly-Toland administration “has once again ‘axed’ the tax cuts and vetoed SB8, therefore, killing important tax policy that would help veterans, the disabled community, and spur the Kansas economy all because of their irrational focus and political bias against helping vulnerable new mothers,” House Speaker Dan Hawkins, a Wichita Republican, said in a statement.

When the override attempt on the flat tax bill failed last month GOP leaders in the Legislature were quick to blame Kelly for denying Kansans tax relief as the state saw large budget surpluses.

Kelly’s office in response distributed a copy of a tax plan they said they offered to Republicans as an alternative that included the elimination of all income tax on Social Security benefits, an increased standard deduction and a child care tax credit among other things.

But Republican leaders said they were unaware of any proposal. Senate President Ty Masterson, an Andover Republican, called the proposal a “public gimmick” to distract voters from her veto.

Kelly told reporters last month the rejection of the flat tax was a victory for Kansans because it would protect the state’s fiscal health for years to come.

“I’m not going to take any blame for the lack of tax cuts this year because I offered several very reasonable options for them,” Kelly said.

“They just instead decided to go after something that was reckless and unreasonable,” she added.