Kansas taxation committee hears bill to tie future income-tax cuts to revenue "growth trigger"

Kansas House Committee on Taxation members heard proponent and opponent testimony on House Bill 23‑18 on Feb. 25, a proposal that would automatically reduce state income‑tax rates when inflation‑adjusted general revenue collections exceed a fixed baseline.

The bill would require the director of the budget to determine on Aug. 15 of each year whether adjusted general revenue fund collections exceed a statutory baseline adjusted for inflation; any excess above that inflation adjustment would be converted under a formula into reductions in the personal income‑tax rate until a single personal rate of 4.5 percent is reached, and thereafter would reduce the corporate surtax until the combined corporate rate also equals 4.5 percent. Committee members heard competing arguments about the effects on state competitiveness, budgets and local property taxes.

Proponents said the measure would create a predictable, data‑driven path for reducing tax rates when revenues permit and would help Kansas compete with neighboring states. "We appreciate the opportunity to be here today in support of House Bill 23‑18," said Eric Stafford, vice president of government affairs for the Kansas Chamber. Stafford described the bill as modeled on growth‑trigger laws in states such as North Carolina and West Virginia and said the mechanism would use excess revenue above an inflation‑adjusted baseline to “buy down the rate.” Tanner Temple, deputy state director for Americans for Prosperity of Kansas, told the committee the bill would "provide a sustainable path to tax relief" and called the certification and calculation steps transparent because they rely on budget office and revenue department determinations.

Proponents provided a baseline revenue figure used in the bill’s draft testimony: $10,003,833,599. Eric Stafford explained that the baseline is adjusted annually for inflation and that any receipts growing beyond that inflation adjustment would be applied to reduce rates to the nearest hundredth of a percent, with the baseline resetting upward after a reduction. Committee staff and budget office representatives told members that current revenue forecasts do not show a first‑year trigger; one fiscal staff member said there is no forecasted increase in the current year that would activate a rate decrease.

Opponents said the automatic, one‑way trigger would permanently reduce rates in response to temporary revenue surges and would make it harder for the state to maintain essential services during downturns. "Buying down the income tax rate just because tax collections come in higher than expected is a short‑sighted approach to budgeting that could ultimately jeopardize the financial health of the state," Nathan Kessler, tax policy advisor for Kansas Action for Children, testified in opposition. Donna Ginther, professor of economics and director of the Institute for Policy and Social Research at the University of Kansas, told the committee the proposal "makes the state vulnerable to unanticipated surges in revenue" and noted it would not protect against revenue declines.

The committee also heard narrower technical concerns. Alex Orel, senior vice president for government relations at the Kansas Bankers Association, urged an amendment or drafting assistance to address how Kansas’ privileged bank tax (the "privilege tax") would interact with reductions tied to the corporate rate because banks are subject to a distinct tax structure. Orel asked staff whether statute can accommodate the sliding calculations for the privilege tax and said resolving that would require detailed drafting.

Representatives asked clarifying questions about how the formula would respond to court‑ordered spending increases, whether rate reductions could be reversed if receipts later fell, and whether reductions would be incremental or formulaic. Representative Tom Helgerson (role/title as stated in committee) asked about court‑ordered mandates and whether required spending would be accounted for before reductions; the bill’s reviser explained the mechanism looks at tax receipts, not spending, and determines reductions based on collections compared with the inflation‑adjusted baseline. Committee members were told the rates, once lowered under the trigger, would be held steady until further reductions occur (they do not automatically increase under this bill).

Committee fiscal staff told members a formal fiscal note was not yet loaded to the committee S:drive; staff described the current note as effectively null for the first year because current revenue estimates do not forecast a trigger during the immediate budget period. Proponents acknowledged that the bill would change how lawmakers plan budgets by constraining available revenue growth for discretionary spending in years the trigger fires.

The committee received additional public testimony in support from Dennis Hall, state affairs manager for Americans for Tax Reform, who described other states’ experiences with growth triggers; and in opposition from Leah Fleiter of the Kansas Association of School Boards, who said the bill would limit the state's flexibility to address property‑tax concerns and other priorities. No vote on HB 23‑18 was taken during the hearing.

The committee approved a separate, brief procedural request earlier in the meeting: Representative Pat Proctor requested introduction of RS 16‑14, a drafting request that would add trail riding to the list of activities covered by agritourism; the committee chair said, "Any objection? Seeing none, the request is approved." That introduction request was approved without recorded roll‑call.

The committee chair closed the hearing on HB 23‑18 after questioning and testimony and announced additional scheduled business, including a planned hearing on House Bill 23‑96 the next day.