Kansas governor vetoes another tax cut bill

Kansas Gov. Laura Kelly on Wednesday vetoed tax cut legislation that she called “too expensive” and offered lawmakers a less-costly alternative.

The Democratic governor, who in January vetoed a previous tax reduction bill passed by the Republican-controlled legislature, said the latest measure “jeopardizes our state’s future fiscal stability.”   

House Bill 2036, which cleared the House in a 119-0 vote and the Senate in a 24-9 vote earlier this month, includes on the state’s AA-minus rating to positive last year. 

Fitch Ratings, which in January released its first-ever issuer default rating for Kansas at AA, cited the state’s “sustained trend of structurally balanced budgets” and the rebuilding of fiscal reserves to levels well above historical norms.

The state has tapped its surplus to reduce unfunded pension liabilities, call bonds, and cash fund projects.

A revenue estimate released last week showed general fund revenue growing by 9.7% to $10.18 billion in fiscal 2024 and by 2.2% to $10.4 billion in fiscal 2025, which begins July 1.