Kansas Chamber’s sweeping legislative agenda centers on tax cuts, one-time investments

TOPEKA — The Kansas Chamber wants the Legislature to deploy a big chunk of the state’s budget surplus toward shrinking tax rates and making one-time economic investments while restraining government regulation, electricity costs and court involvement in K-12 funding decisions.

The business lobbying organization objects to raising workers’ compensation benefits, spending tax dollars for lawsuits in pursuit of more public aid, expanding Medicaid eligibility and trimming tax incentives for growing companies. The Kansas Chamber is pushing for workforce development through apprenticeship programs and upgrades in K-12 instruction in compute science.

The 2022 legislative agenda is a comprehensive plan stepping into nine policy arenas associated with strengthening the Kansas economy by eroding barriers to business expansion and employment growth, said Alan Cobb, president and chief executive officer of the Kansas Chamber. The annual agenda was released last week in conjunction with start of the 2022 legislative session, which resumes Tuesday after Martin Luther King Jr. observances Monday.

“As more job creators recover from the impacts of the COVID-19 pandemic, so will their employees, their communities and our great state,” Cobb said. “However, Kansas cannot continue its progress to improve its business climate without a vision that is led by innovation and the competitive nature of the free market and private sector.”

The Kansas Chamber has members scattered across the state in all types of industries. Half of the organization’s members have 100 or fewer employees. There is a sense Kansas is struggling with the quality and quantity of workforce as well as supply chain issues along with inflationary pressures, Cobb said.

Cobb and Eric Stafford, the Kansas Chamber’s primary lobbyist at the Capitol, said on the Kansas Reflector podcast that a portion of the state’s $2.9 billion surplus driven by federal spending and businesses clawing through the COVID-19 pandemic should be directed at lowering the burden of sales, income and property taxes in Kansas.

“All of the above should be on the table for consideration,” he said. “Use those dollars efficiently and responsibly. But let’s look at some some tax revenue adjustments.”

It’s an election year with all 125 seats in the Kansas House up for grabs along with the six state offices. Democratic Gov. Laura Kelly proposed elimination of the 6.5% state sales tax on groceries and a cash rebate that would collective consume $1 billion of the cash surplus. The Kansas Chamber would prefer a general sales tax rate cut. Other political figures in the statehouse have contributed to the avalanche of recommendations for tax adjustments.

The Legislature is likely to consider a bill that would take Kansas from three income tax brackets to a single rate. It’s possible to link step-by-step reductions to growth in state tax receipts.

“If you look at our rates, compared to particularly our region, corporate income tax rate is high,” Cobb said. “The personal income tax rates are high.”

Nearly a decade ago, then-Gov. Sam Brownback signed into law an aggressive reduction in the state’s income tax. His vision was to eventually do away with income tax collections in Kansas by shifting the burden to sales and property taxes. Massive state revenue losses weren’t offset by equivalent reductions in state spending or growth in tax revenue through business expansion, and the result was years of economic distress.

Otherwise, the Kansas Chamber said, federal economic aid should be funneled into one-time investments, perhaps the state pension system, to avoid adoption of programs requiring ongoing state appropriations.

The Kansas Chamber endorsed retention or expansion of a series of tax-related incentives for business and recommended expansion of small business development loans for start-ups through private banks rather than the state.

Cobb said the state would reap economic rewards by improving technical skills of its workforce through investment in a new tax credit for employers who participated in a registered apprenticeship program. Kansas lags behind Oklahoma and Nebraska in support for this kind of on-the-job workforce development, he said.

The Kansas Chamber also would appreciate support through K-12 schools of work-based learning opportunities and enhancement of computer science courses. The organization also believes the state’s education system should dial back teacher certification restrictions, promote school choice and advance a constitutional amendment declaring the Legislature the “exclusive authority” — not the courts — in assessing equity and suitability of school funding.

In terms of legal reform, the Kansas Chamber urged lawmakers to require disclosure of third-party financing of lawsuits.

“There are hedge funds that operate to finance litigation in our country, and they make money off litigation,” Stafford said. “And all we’re asking is that it’d be disclosed to the defense that there is a third party to the case that has a financial interest in the case.”

The Kansas Chamber also supports greater access to telemedicine to expand health care services and lower costs of individuals and employers. In addition, the Kansas Chamber said it was time the state eliminated government restrictions on medical professionals’ ability to perform duties within their scope of practice.

“Increasing health care access by providing increased flexibility for frontline providers and treatment is among the Kansas business community’s top priorities, especially as the COVID-19 pandemic continues to affect operations and workforce,” Cobb said.