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Under the Dome - May 21, 2013

Taxes - a meeting but no resolution

There was a new tax offer from the Senate today. It is similar to that of the House but with some significant differences. It follows the pattern of the last house offer but with different numbers.

Here is a comparison of current law with the last House offer and the current Senate offer when it comes to changes to income tax brackets:

                            Current law             House offer             Senate offer

Bottom 2013            3.00%                        3.00%                2.90%
Top 2013                 4.90%                        4.90%                4.80%

Bottom 2014            3.00%                        2.70%                2.80%
Top 2014                 4.90%                        4.90%                4.60%

Bottom 2015            3.00%                        2.70%                2.70%    
Top 2015                 4.90%                        4.80%                   4.50%

Bottom 2016            3.00%                        2.25%                2.60%
Top 2016                 4.90%                        4.80%                4.40%

Bottom 2017            3.00%                        2.10%                2.50%
Top 2017                 4.90%                        3.80%                3.50%

Bottom 2018            3.00%                        2.10%                2.50%
Top 2018                 4.90%                        3.80%                3.50%

Both plans also trim itemized deductions. They give "haircuts to itemized deductions with the Senate elimating them entirely by 2018. The Senate haircuts don't apply to charitable deductions while the house cuts do. Both plans immediately eliminate the deduction for gambling losses. The haircut reductions are as follows:

        Current law     House plan     Senate offer

2013         --                 24%                 25%
2014         --                 35%                 40%
2015         --                 40%                 55%
2016         --                 50%                 70%
2017         --                 60%                 85%
2018         --                 60%                 100%

Both plans reduce the standard deduction for head of household from $9000 to $5000 and for married filing jointly from $9000 to $6500.

After presenting this offer, the House went off to consider it. When returning later in the evening, the House indicated they needed more time to consider the offer and it was agreed to meet tomorrow at 9:30 am.

A budget bill is ready

The House and Senate budget conference committee also met this evening and the Senate accepted the latest offer from the House. This will be put in SB 171, a Senate bill, which means that the House will vote on it first. The staff indicated things could be ready for a consideration as early as tomorrow afternoon.

For education there are essentially three items that diverge from the Governor's budget.

Communities in Schools would receive $250,000 - the Senate position.

Higher education would be cut by 1.5% in 2014 and another 1.5% in 2015. (Less than the original House position of a 4% cut or Senate position of a 2% cut.)

If "Read to Succeed" does not pass (the retention bill), then the money for that program would be used to support a pilot program in the Lexia reading program which is being used in some Kansas school districts now.

The proviso banning expenditures on the Common Core Standards has been dropped. Staff indicated that including the proviso would violate the 2-subject rule (a bill cannot contain two subjects) and would be unconstitutional. This issue is probably dead for this year but we'll keep an eye out for further attempts to press the issue.

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