Archive for Tuesday, March 13, 2007

Businesses may see tax relief from state

March 13, 2007

Flush with surging tax revenues, Kansas legislators are bound and determined to hand out tax relief.

But who will get the tax breaks?

So far, business is good for business.

On Monday, House Republicans approved an $80 million reduction in unemployment insurance taxes that employers pay, while rejecting an attempt by Democrats to eliminate the waiting week for unemployment benefits to start.

Democrats said the action showed how Republicans, who dominate the Legislature, will carry the business agenda while turning their backs on working Kansans.

"We do a lot of things to address business needs," said House Democratic Leader Dennis McKinney, of Greensburg. "What has been missing is what do we do for young families?"

But Rep. Kenny Wilk, R-Lansing and chairman of the House Tax Committee, said tax relief for businesses produces more jobs for Kansans.

"When we do stuff for businesses, that affects individuals, too. It's all a matter of perspective," Wilk said.

Today, the House is expected to debate legislation to exempt Social Security income from state income taxes, saving seniors nearly $19 million per year. Some Democrats have said the proposed tax break should be reserved for low- and middle-income seniors.

Earlier this session, the House approved eliminating the business franchise tax over three years, but days later rejected an attempt to raise the state minimum wage of $2.65 per hour, which is the lowest in the country. Currently, businesses pay approximately $44 million per year through the franchise tax. Gov. Kathleen Sebelius, a Democrat, has recommended a smaller business tax cut.

But on one tax cut, Republicans and Democrats seem to be joining forces.

A bipartisan bill expected to emerge from Wilk's committee this week would nearly double the amount of property tax relief for homeowners who are 55 or older.

The homestead tax relief program provides property tax refunds of up to $600 for Kansans whose household incomes are less than $28,000. Under the new proposal, the maximum refund would increase to $700, and Social Security benefits wouldn't be included in calculating household income.

"This is probably some of the better property tax relief we've had since I've been up here," Wilk said.

Rep. Paul Davis, D-Lawrence and a member of the Tax Committee who has worked on the proposal, agreed.

"People are hearing over and over again that there is really a problem with seniors being hit hard by property tax issues," he said.

"I sense there is really interest on both sides of the aisle to do something about that. This gets the relief to the people who need it the most."

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