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Under the Dome - May 22, 2013

Offers and counter offers

The House and Senate Tax Conference Committee met three times today in the march toward the end of the session. Unfortunately, the issue is no closer to resolution now than it was yesterday. Here's the summary of offers and counter offers.

The House is holding at a 6% sales tax rate; the Senate's last offer was 6.25% on most sales but 5.7% on food.

This chart compares that last three offers with current law on income tax rates:


                        Current law     Senate offer; 5/21     House counter; 5/22     Senate counter; 5/22

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

Bottom 2013        3.00%                2.80%                    2.80%                            2.80%
Top 2013            4.90%                 4.60%                    4.90%                            4.60%

Bottom 2013        3.00%                2.70%                    2.70%                            2.70%
Top 2013            4.90%                 4.50%                    4.80%                            4.50%

Bottom 2013       3.00%                2.60%                    2.50%                            2.60%
Top 2013            4.90%                4.40%                    4.80%                            4.40%

Bottom 2013        3.00%                2.50%                    2.50%                           2.50%
Top 2013            4.90%                3.50%                    3.80%                            3.50%

Bottom 2013        3.00%                2.50%                    2.50%                           2.50%
Top 2013            4.90%                3.50%                    3.60%                            3.50%

Trimming itemized deductions. Both plans give "haircuts" to itemized deductions with the Senate eliminating 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. This chart shows the reductions in itemized deductions by year:

Tax year     Senate offer; 5/21     House counter; 5/22     Senate counter; 5/22

2013                25%                            25%                            25%
2014                40%                            30%                            40%
2015                55%                            35%                            55%
2016                70%                            40%                            70%
2017                85%                            45%                            85%
2018                100%                          50%                            100%

Both plans restore the adoption tax credit and do not restore the food sales tax rebate for the poor.

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

In terms of the ending balance, the Senate plan predicts a 10.1% ending balance in 2013 falling to 0.6% on 2018. The latest House proposal starts at 10% in 2013 and drops to a negative 1.6% in 2018.

In the third meeting late this afternoon, it was the House's turn to counter the last Senate offer. But House Chairman Richard Carlson came to the meeting and announced that they were not prepared to give a counter. As a result, they have scheduled their next meeting for tomorrow morning at 9:30.

Did the budget pass?

No, not yet. While it was believed that the House would run the budget conference committee report this afternoon, that did not happen. Most hall talk is that the House won't consider the budget until the tax issues are wrapped up. With slow progress on the tax negotiations and Senate Tax Chairman Les Donovan having to leave tomorrow afternoon for another commitment (remember, we were supposed to be done on day 80 and tomorrow is day 90), it's looking like this session is going to be extended.

Anti common core crowd still at work

The fact that the anti-common core standards bill was voted down in committee and never heard in the Senate did not stop Senator Ty Masterson from proposing an end to common core standards as a proviso to the budget. And now that legislators have learned that putting such a thing in a budget bill would violate the constitutional prohibition on two subjects on one bill, the anti-standards folks are looking for any opportunity to block the adoption of career and college ready standards for Kansas schools.

We know one legislator is circling a petition trying to get a resolution together. So we urge you to contact your legislators and ask them to let our schools and state department continue the work of improving our standards such that every Kansas child is career or college ready.

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