TOPEKA, Kan. (AP) — Many Kansas families would save hundreds of dollars a year under a proposal Democratic Gov. Laura Kelly outlined Monday to eliminate the state's unusually high sales tax on groceries.
Kelly's proposal, which would save consumers roughly $450 million a year, comes at a time when the state is flush with cash, thanks to tax collections that have exceeded expectations for months. But if a measure reducing or eliminating the tax passes the Republican-controlled Legislature, she'll face a partisan fight over credit as she seeks reelection next year.
The governor unveiled her proposal three days after GOP Attorney General Derek Schmidt called on lawmakers to cut or eliminate the 6.5% tax. Schmidt didn't make a specific proposal but told top Republicans in a letter Friday that he is “ready to assist” them in passing a measure.
Kelly made reducing or eliminating the sales tax on groceries a key campaign promise during the governor's race in 2018. She said she's waited until now to push the issue to be sure that the state's finances are stable enough to sustain the tax relief into the future. Tax collections have run 18.9% ahead of expectations from July 1 through Oct. 31 and generated a surplus of $440 million.
“We can deliver this for families without diverting resources from other state services or agencies,” Kelly said.
Kelly announced her proposal during a news conference in the produce section of a Dillons grocery store in north Topeka, as curious shoppers looked on. She held up an axe to symbolize her push to “axe” the tax on groceries and wore an axe pin on her lapel.
The proposal would save consumers $6.50 for every $100 spent on groceries. A family that spends an average of $200 a week on groceries would save $676 over a year.
Kansas is one of only 13 states with a sales tax on groceries and one of only six that taxes groceries at the same rate as other consumer goods, according to the Federation of Tax Administrators. Kansas' rate of 6.5% is second only to Mississippi's 7%.
“Eliminating the sales tax on groceries can immediately benefit all Kansans, and it will provide the greatest help to those in greatest need,” Schmidt said in his letter to GOP legislative leaders, echoing an argument that lawmakers in both parties have made for more than two decades.
Cutting or eliminating the tax is likely to have widespread appeal to consumer-voters.
“I work hard and I try to eat the right foods and try to eat healthy,” said Karen Thornwall, a part-time instructor at Washburn University and substitute teacher in Topeka. “A lot of people will say they can’t afford to buy even the healthy foods because it’s expensive but a lot of it is the tax that we pay on the food as well.”
But the Legislature's debate next year will likely be clouded by election-year politics.
Republican lawmakers included proposals for modest reductions in the sales tax on groceries in two tax-cutting bills they approved in 2019, but they tied their proposals to income tax cuts that Kelly called fiscally reckless. She vetoed both bills.
“They always play politics with it,” said House Minority Leader Tom Sawyer, a Wichita Democrat, who advocated eliminating the sales tax on groceries during his unsuccessful run for governor in 1998.
Republicans hope to persuade swing voters that Kelly couldn't deliver on her 2018 promise and that a measure wouldn't pass without Schmidt intervening.
Indeed, Schmidt's campaign posted on social media ahead of Kelly's event Monday that, "We need a governor who will get the job done for Kansas families.”
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