Kansas Political Columnist Martin Hawver

Hawver: Puff of White Smoke

Martin Hawver, Columnist
Martin Hawver

Thursday will be, well, not quite the same as a puff of white smoke emerging from the Vatican to signal selection of a new Pope, but close for us habitués of the Kansas Statehouse.

It’s the day that the Consensus Revenue Estimating (CRE) Group posits just what the state will book in revenues for the remainder of this fiscal year (to June 30) and for the upcoming fiscal year.

That estimate becomes the basis for every dime in spending that the Kansas Legislature will approve for the rest of this, and all of the next, fiscal year.

It’s the bank account. Don’t over-spend, and at the same time, don’t not spend enough to provide Kansans the services that they want their state—and its governor and Legislature—to spend on them.

The group, professors and economists and such, looks at virtually every tax number available. Then they estimate just how much of that will wind up in the State General Fund, and then the governor and legislators spend it.

This year’s CRE will provide the first good look at the “trickle down” of the December 2017 federal income tax cuts, which presumably freed up more money for the state to levy taxes against.

Businesses—those with overseas interests—that have been pushing for $130 million in income tax cuts to keep their tax bills level may or may not be able to recalculate just how much in the way of tax breaks they need to keep their profits stable or growing. Then they just have to squeeze it out of the Legislature.

And individual income taxpayers? Not sure, but the CRE will likely tell us how those federal income tax changes—lower rates—will work to make more of their income taxable by the state. Remember, Kansas income tax calculations start with what’s left over after you’ve paid your federal income taxes.

While the rate reductions are a key to that CRE computation, it may well tell legislators just how those new and higher federal standard deductions ($12,000 for single filers, $24,000 for marrieds filing jointly) will work with the state’s standard deductions. Remember, because the Legislature hasn’t “de-coupled” those standard deductions, if you can’t top the federal standard deduction then you are stuck with the Kansas standard deduction–$3,000 for singles, $7,500 for marrieds filing jointly.

What might we learn Thursday? Well, it starts with CRE predicting enough revenue to finance government, and probably pick up some of those services that have been squeezed the last few years because revenues were lower than hoped.

And if the estimate is for more money than needed for those basics? Well, after saving a dab for fiscal safety, there’s likely to be some room for tax cuts—possibly even this legislative session.

Of course, then the fight over the tax cut bill that Gov. Laura Kelly vetoed starts again, but at least there would be an identifiable amount of money that can be spent on tax cuts—after the social welfare, education, transportation and administrative pieces of the state budget are taken care of.

How much will be floating around? We’ll know Thursday.

And who gets that loose change in the state’s pocket?  Corporations? Probably not. Individual income taxpayers? That’ll be fun to watch. Give it to the poor and middle-class or give it to the wealthier Kansans. As we recall, each of those folks gets one vote, and there are more Kansans in the lower brackets than at the top.

That CRE puff of white smoke? It might blow in a lot of directions…


By Martin Hawver

Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver’s Capitol Report—to learn more about this nonpartisan statewide political news service, visit the website at www.hawvernews.com