By Gene Meyer

Kansas is in a state of transition, Gov. Sam Brownback said Jan. 11 in his State of the State message to legislators.

Kansas, he said, is changing from a state with high taxes to a state where taxes are low.

Kansas made significant progress in the past year, Brownback said during his 30-minute speech. Kansas had $876 in its checking account when he took office, and 12 months later it has more than $100 million, he said.

“We overhauled our state’s economic-development system, enacted modest tax relief and sent word around the world that Kansas is open for business,” Brownback said.

But more needs to be done, he said. The governor called on lawmakers to continue the work they’ve begun toward cutting taxes, revamping the state’s budget-dominating school funding and Medicaid programs, and making further cuts in state spending.

“We need to do as much as we can to improve Kansas’ business and grow the private incomes of its citizens,” said state Rep. Richard Carlson (R-St. Mary’s), chairman of the Kansas House Taxation Committee, which got a closer look at the governor’s tax proposals Jan. 12.

“He (the governor) certainly hit all the right notes,” said state Sen. David Haley (D-Kansas City). “It’s the direction Kansas wants to go, but we still must ask what we have to give up to get there.”

Brownback outlined what he described as “a major step in overhauling our state tax code to make it fairer, flatter and simpler.”

The plan would lower the state’s top personal income tax rate of 6.45 percent to 4.9 percent for taxpayers with incomes of more than $15,000, or $30,000 for married taxpayers filing jointly. Rates for taxpayers with lower incomes would drop half a percentage point – to 3 percent – and individual state income tax on most small business income would be eliminated.

“As we modernize our tax code and lower everyone’s rates, it is also time to level the playing field and simplify state taxes by eliminating income tax credits, deductions and exemptions,” the governor said.

“With that in mind, I ask the Legislature to limit further growth in government expenditures to no more than 2 percent a year, and devote all additional revenues to reduction in state tax rates,” Brownback said. “This will get us even closer to the pro-growth states with no state income taxes, which are among the country’s strongest economic performers.”

Kansas Revenue Secretary Nick Jordan is scheduled to outline more details of the proposals in a Thursday morning meeting with the Kansas House Taxation and Senate Assessment and Taxation Committees – the top tax committees in both houses.

Brownback said his proposed fiscal 2013 state budget would provide for an ending balance of $465 million, larger than a statutorily required 7.5 percent of the budget that past legislators have waived since the onset of the Great Recession.