Proposal follows bipartisan 2024 law cutting Kansas’ upper bracket to 5.58%
BY: TIM CARPENTER
Kansas Reflector
TOPEKA — The Kansas Chamber business lobbying organization wants to convince the 2025 Legislature and Gov. Laura Kelly to pass a law tying increases in state expenditures to the inflation rate and devoting excess revenue to lowering the state’s individual income tax rate to 4.5%.
The objective would be to take a step beyond a 2024 law imposing $1.2 billion in tax reductions over three years and implementing a structural change to move from three to two personal income tax brackets. That law passed during a special legislative session and signed by Kelly cut the state’s upper individual income tax bracket from 5.7% to 5.58% and set the lower bracket at 5.2%.
Senate President Ty Masterson, R-Andover, and House Speaker Dan Hawkins, R-Wichita, have advocated for a single-rate state income tax. In 2024, for example, the Senate passed a bill that would automatically shrink a single rate over a six-year period to 5.45% by 2029.
Alan Cobb, the Kansas Chamber’s president and CEO, said the organization would focus on adoption of a single bracket and the goal of a rate of 4.5%.
He said Kansas was ranked 25th nationally by the conservative Tax Foundation in terms of business climate. Thirty-one states lowered income tax rates during the past four years, he said.
“Kansas is an affordable and enjoyable place to raise a family, but overall has a high tax burden,” Cobb said. “As other states take action to become more attractive and competitive for investment, Kansas continues to fall behind.”
The Kansas Chamber vowed to support efforts to reduce corporate income taxes despite Kelly’s rejection of proposals to eliminate the state income tax on businesses.
“Going forward, I will not support any proposal that robs our schools of the funds they need to teach our children,” Kelly said. “There was a proposal to slash the state corporate income tax to zero. That is a nonstarter.”
In 2012, the Republican-led Legislature aggressively reduced Kansas income taxes in an experiment in supply-side economics. Lawmakers in Kansas didn’t match the popular tax cuts with unpopular spending cuts. That led to five years of budget problems and produced a sales tax increase and cuts to schools, highways and other core government programs. The GOP-led Legislature repealed much of that tax program in 2017.
Cobb said the lobbying organization would oppose proposals to apply a sales tax to professional services or to repeal existing sales tax exemptions for businesses.
Kansas ranked 10th among U.S. states in terms of renewable energy production, Cobb said, but the low-cost energy source hadn’t resulted in meaningful savings for consumers. State lawmakers should maneuver to deal with above-average energy costs that hurt businesses, Cobb said.
Cobb said the state should reverse erosion of liability protections for businesses and individuals. Altering the state’s legal environment to lower insurance premiums would help with economic competitiveness, he said.
He said Kansas could pursue reform that reduced scope-of-practice barriers for health professionals and broadened licensure reciprocity so workers from other states could more easily transition to jobs in Kansas. The change would help address workforce shortages and access to health care, he said.
The Kansas Chamber annually produces a policy agenda based on past legislative activity and polling of business leaders. The 2025 edition can be found here.