A push to gut Kansas’ food sales tax could come up against an election

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By Dylan Lysen Kansas News Service

LAWRENCE, Kan. — Grocery shopping just got harder for Patty Wiggins.

It used to be that a week’s worth of groceries cost the retired nurse about $30. But since last year’s inflation apparently made everything more expensive, groceries cost around $50.

To help fill that gap, Wiggins, who lives in Lawrence, supplements her groceries through her local food bank, Just Food. Wiggins said she wishes she didn’t have to, and there is hope relief is on the way.

Kansas lawmakers are debating a bill that would eliminate the state sales tax on food. If the bill becomes law, it would eliminate the 6.5% sales tax on food and provide a little more leeway for shoppers like Wiggins.

“(Spending) an extra $10 or $20 a month might not seem like a lot,” Wiggins said. “But it makes a difference, especially when you live like me on a fixed income.”

Despite apparent bipartisan support for dumping the food sales tax — it’s a top priority for Democratic Governor Laura Kelly and the change has the backing of Attorney General Derek Schmidt, her likely challenger for re-election in November — the effort seems flimsy at best.

Already, a state Senate committee has amended the proposal to delay the end of the tax by one year, to Jan. 1, 2024.

The Republican-controlled legislature has also tried to tie the measure to other, more partisan tax changes. And GOP lawmakers might be reluctant to give Kelly a victory on tax cuts in an election year. Can the state afford it?

Can the state afford it? Republican State Sen.

Republican Sen. Caryn Tyson of southeast Kansas chairs the tax committee and said eliminating the food sales tax was complicated by another major tax bill. The governor has pushed for a change in the law that will allow the state to award about $1 billion in potential tax incentives to a company – its identity has not been made public – if it follows through on its promises to a manufacturing plant with thousands of jobs.

Tyson said if the company chose to move to Kansas, the state would provide millions of dollars in incentives to the company for years to come. Removing the food sales tax could cost the state $320 million to $785 million a year in revenue. Tyson said the tax giveaways to a major new employer would make it harder to pay the state lost money that would come with the sales tax food exemption.

“We have to be good stewards of state money,” Tyson said. “This needs to be considered when working on other types of legislation.”

In addition to pushing back the start date for the food sales tax reduction, the amended bill also includes changes to the state sales tax on utilities.

Senator Tom Holland, the top Democrat on the tax committee, wants the food sales tax gone in July — not a year and a half later.

Holland also said Kansas could afford to offer incentives to a manufacturer and reduce sales tax because the state expects to have more than $2 billion in surplus by the end of the year. exercise in June.

“We need to return this tax relief to Kansas families,” he said. “The best way to do that is with a sales tax refund invoice.”

Inflationary pressure Proponents of the cut said it was necessary now to give the Kansans a break when food prices soared.

The US Department of Labor says the country has seen a 7.5% increase in the rate of inflation over the past year, which is the biggest increase since 1982.

Wiggins, the retired nurse, said she saw a slight increase in her Social Security checks. But she said it didn’t make much difference.

“It all disappeared because of inflation,” Wiggins said. “They say inflation has hit parts of the grocery store. But what I see in stores, it has affected everything.

She is not alone. Brain Walker, president of the Wichita-based Kansas Food Bank, said many of the more than 200,000 Kansans his organization serves would benefit from food sales tax relief. Removing the tax would immediately allow them to put more food on their tables, he said.

Low-income people are disproportionately affected by the tax, Walker said. He used the example of a family of four earning $20,000 a year and buying the same amount of food as a family of four earning $100,000 a year. While families buy the same amount of food and pay the same amount of tax, the family with a lower household income pays a higher percentage of that income in tax.

“To us, that really makes sense,” Walker said. “When you reduce sales tax, you don’t favor anyone – both groups of people get the relief. But the help he brings to a family in difficulty is enormous.

Electoral politics

Debates over giving consumers breaks and whether the state can afford the lost revenue — Republicans note that the state’s fiscal surplus is supported by federal pandemic aid that won’t will not continue in future years – occur in the middle of an election year.

Kelly, who is seeking a second term, has repeatedly called for the tax to be reduced. He was featured prominently in his state of the state address in January and his “Axe the Food Tax” slogan plays into his re-election campaign. Kelly says it would save the average Kansas family about $500 a year.

But Schmidt also asked lawmakers to make a cut this year.

In a letter to Republican legislative leaders in November, Schmidt called on lawmakers to eliminate or at least drastically reduce the grocery tax due to inflation.

Wiggins said she hopes lawmakers will soon approve the legislation.

“It would be nice to think that they would embrace it and start changing (the tax),” she said. “I’ll believe it when I see it.”

Dylan Lysen reports on politics for the Kansas News Service. You can follow him on Twitter @DylanLysen or email him at [email protected]

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