2024 Legislative Tax Saga: Proposals and What Finally Passed
Nathan Kessler | September 30, 2024
The 2024 Kansas legislative session brought with it a variety of ideas for delivering tax relief to Kansans. We saw appetite for a state child tax credit (CTC), a higher match of the federal Child and Dependent Care Tax Credit, and family-friendly sales tax changes that we should not lose sight of.
The session began with the Governor proposing a modest package that included acceleration of the state grocery sales tax elimination while implementing a back-to-school sales tax holiday and permanently exempting diapers and feminine hygiene products from state sales tax.
Amid many of the Legislature’s flat tax or two-bracket income tax plans, a successful amendment to SB 539 resulted in adding a CTC to the bill before it died in the House Committee on Taxation. The legislation that ultimately became law, SB 1, doubled the state match of the federal Child and Dependent Care Tax Credit (CDCTC) from 25% to 50%.
Some of the 2024 tax proposals showcased Kansas’ commitment to family-friendly tax policy, while others represent fiscal and social irresponsibility. The fiscal impacts for these bills are summarized in the table below and a more detailed explanation for each piece of legislation can be found in KAC’s analysis of the 2024 tax plans.
While the CTC offered by SB 539 would have been a big win for Kansas families with young children, the bill, along with HB 2284, included a flat tax provision that would have devastated Kansas revenue and placed a higher burden on low- and -moderate income Kansans while mostly benefitting wealthier individuals. This inclusion is unfortunate, as, after FY 2025, the cost of the CTC would have been less than $50 million per year through FY 2029 – a fraction of the cost of the flat tax that derailed the plan. Many of the failed tax plans could have also jeopardized adequate public school funding through aggressive property tax reform without any offsets.
What ultimately passed in SB 1 is meant to provide welcome tax relief to Kansans without compromising the state’s fiscal stability. Increases to the state match of the federal CDCTC and higher personal exemptions are promising reforms that benefit families across the state. Unfortunately, SB 1 also reduced the number of state income tax brackets from three to two, weakening the progressivity of the state income tax, reducing future revenue, and inching the state that much closer to implementing a flat tax.
Thousands of Kansas families that continue to be burdened by the costs of raising a family will see little benefit from SB 1. Future tax legislation should prioritize renters and low-income families through bold policy initiatives that ensure every Kansas child, regardless of class, race, or ethnicity, can thrive.
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