NEW REVENUE ESTIMATES PREDICT DECREASE;

Speaker urges Governor not to veto tax cuts for Kansas businesses and families

IMMEDIATE RELEASE
April 16, 2007

Topeka – Kansas House of Representatives Speaker Melvin Neufeld (R- Ingalls) said Kansans should not panic over revised revenue estimates released today.

The new estimates by the Consensus Revenue Estimating Group show an increase of $140.1 million for Fiscal Year 2007 and a decrease of $153.6 million for Fiscal Year 2008 compared to November 2006 estimates.  The revised numbers include the estimated fiscal impact of 2007 legislation signed and expected to be signed into law.

“This estimated decrease of a combined $13.5 million is not unexpected,” Speaker Neufeld said.  “The 2007 Legislature made some significant changes to our state’s tax policy to lessen the tax burden on Kansas businesses and families.  And while the new numbers may reflect those cuts in revenue, they do not reflect the predicted economic growth the tax cuts and relief will have on our state’s economy.  I am confident the Kansas economy will remain strong.”

The House and Senate approved about $31 million worth of tax cuts in the next fiscal year, totaling nearly $300 million in the next five years. 

• HB 2264 repeals the State Franchise Tax. The five year phase-out begins by raising the threshold rate of business assets from $100,000 to $1 million in the first year.  Then the franchise tax is cut 25% a year until it evaporates

• HB 2031 exempts Social Security Benefits from state income tax for retired and disabled Kansans who make less than $50,000 less this year and $75,000 in 2008. 

• HB 2031 also increases the Kansas Earned Income Tax Credit from 15% to 17% of the federal earned income tax credit that the state matches.

• HB 2476 increases the maximum credit to $700 in the Homestead Property Tax Refund for homeowners and renters whose total annual household income is less than $28,000.  Also now excludes 50% of Social Security benefits and all disability payments in determining eligibility. 

The Governor has yet to sign these bills into law.

“I urge the Governor not to veto the tax relief she has yet to sign,” Speaker Neufeld.  “Our economy is not sagging.  These carefully crafted tax cuts for Kansas businesses and tax relief for seniors, the disabled and families on limited income will keep our great state moving ahead.”

House Members also fought to reduce the state’s unemployment insurance rates for businesses in good standing.  Senate Bill 83 will save employers more than $175 million during the next two years.

-30-