WICHITA, Kan. (KSNW) – Tuesday night Kansas lawmakers voted to override Governor Sam Brownback’s veto of the tax bill.
The bill is expected to raise $1.2 billion over the next two years to get the state out of an $889 million hole.
It will increase income tax rates and get rid of a tax exemption for more than 330,000 farmers and business owners.
KSN spoke with Dr. Kenneth Kriz with the Hugo Wall School of Public Affairs at Wichita State University.
He says the immediate economic impact could be a slight reduction in growth for the state of Kansas.
Kriz says this is something that is not uncommon when states make tax changes.
He says he helped with a study that was done of all 50 states over a 40 year period of time.
“We found that it lasts about two years and it’s really pretty small, it would be the equivalent of five percent, two percent of our existing growth,” said Kriz.
However, Kriz believes this tax plan will help in the long run.
One reason, the elimination of the tax exemptions for small business owners and farmers.
“There’s a really good study on this that looked at the what should have been positive effects of the 2012 tax changes, and what they found is very few instances where businesses actually moved to take advantage of the new system,” said Kriz.
Small business owners, like Jack Kellogg of Hatman Jack’s took advantage of the tax breaks for LLC’s.
For Kellogg, he says he doesn’t mind the thousands in dollars he used to pay in taxes once again.
“There are burdens for small business, there are small burdens for bricks and mortars stores like I prefer to be, but it will be absorbed and I will carry on,” said Kellogg.
Both Kellogg and Kriz say they believe this tax plan will help the state financially.
“I see it as necessary, to provide basic services from the state, it’s necessary,” said Kellogg.
“There is actually the possibility that you’ll see very good economics out of this because you’re resolving that uncertainty by bringing the budget into more structural balance,” added Kriz.
Kellogg says the only drawback from the new tax plan is that taxes for small business will be retroactive.
That means they’ll go back to the beginning of this year.
Kellogg says he felt it would have been better to make small businesses pay taxes beginning at the end of this month or even July 1st.
This bill is being called the highest tax hike in state history.
If you are married and filing jointly here’s a look at your new rates.