This week Governor Brownback released additional details regarding his tax plan. In addition to tax relief of half-a-billion-dollars over five years, the Governor proposes using state revenue growth greater than four percent to ratchet rates down further until the state income tax is eliminated. In exchange for much lower income rates, the plan leaves the state sales tax flat at its current level of 6.3% and further simplifies the tax code by eliminating the mortgage interest and real estate deductions. The Governor's tax plan will be introduced in Assessment and Taxation early next week.
With concerns growing over the elimination of these deductions, it was noted an average of 70 percent of Kansans use the standard deduction and will not be impacted in any way by the elimination of itemized deductions. Changes to itemized deductions at the state level do not impact federal itemized deductions, which are much larger and still available to Kansans eligible to itemize. Furthermore, the value of itemized deductions at the state level is greatly reduced by the value of large reductions in overall tax rates and significant increases in standard deductions.
My constituents have made it clear they want to have input and understand the reasoning of the proposal to eliminate the mortgage deduction. Message received loud and clear.
The Senate is committed to providing further tax relief for Kansans and to creating a competitive business environment in our state. The private market is where true job creation is made and, in order for Kansas to be competitive, state government must leave more of Kansan's hard-earned money in their pockets. For too long Kansas' high taxes have driven businesses to other states where there is little or no state income tax, like Texas and Florida.
The legislature will continue to discuss tax policy to encourage more growth and more jobs. As this processes continues, I look forward to hearing from you, as this topic affects every one of us.