MESSAGES FROM THE GOVERNOR

House Bill No. 2097

An Act concerning taxation; enacting the Kansas film and digital media production development act; establishing an income tax credit and sales tax exemption program to be administered by the secretary of commerce for the purpose of developing film, video or digital production in Kansas; relating to income, privilege and premium tax credits; establishing a tax credit for employers that employ members of the Kansas army and air national guard and establishing an income tax credit for employees who are members thereof; requiring notices to be sent to inform such members of possible eligibility for the tax credit; relating to sales tax; providing a sales tax exemption for purchases by certain not-for-profit community theaters and purchases and sales made by the friends of cedar crest association; amending K.S.A. 2023 Supp. 79-3606 and repealing the existing section.

Message to the Legislature of the State of Kansas:

Kansans need responsible, comprehensive tax relief. As I said in my last veto statement of the Legislature’s nearly identical tax bill, ‘I cannot sign into law a bill that jeopardizes our state’s future fiscal stability.

I have given the Legislature several roadmaps to fiscally responsible tax cuts since January. Instead, they played political games with reckless tax policies, and I vetoed them. I said irresponsible tax policies would lead to a special session.

So here we are. While I applaud the spirit of bipartisanship, this tax cut package, passed at the 11th hour of the last day of the Legislative session, misses the mark. Its proposed cuts and the excessive spending by the Legislature endanger all the progress we’ve made in restoring services for Kansans, funding our public schools, and investing in our infrastructure.

Additionally, to favor a specific business, a tax abatement scheme was floated to put taxpayer dollars into that business’ pocket at the expense of local government services. That’s wrong. Taxpayer dollars should not be diverted to political donors under the guise of tax cuts.

Kansans expect us to map a responsible future because we have come a long way, together. Our financial ratings have been upgraded. We have paid down debt. We paid $224 million for new projects in cash, saving Kansans $90 million in interest that would have otherwise accumulated through bonds. Education is being funded. We went from zero to a reasonable rainy-day fund for the inevitable emergencies we will face. Kansas is being noticed for its sense of responsibility. Don’t toss all that.

The lack of a fiscally responsible tax cut bill jeopardizes other tax policy passed before adjournment, such as legislation to support Kansas’ film and digital media industry. The Legislature cannot overpromise tax cuts without considering the overall cost to the state for future years. We cannot start with our expenses and then look at our income. Families and businesses do not budget like that; neither should Kansas.

Therefore, pursuant to Article 2, Section 14(a) of the Kansas Constitution, I hereby veto House Substitute for Senate Bill 37, House Bill 2096, and House Bill 2097.

Laura Kelly, Governor

Dated May 16, 2024.