The winter weather shortened the fourth week of the 2022 legislative session with meetings canceled on Wednesday.

The appropriations and commerce committees continued to meet later in the week. The appropriations committee began budget reports from the subcommittees. These reports are the building blocks of our work as we assemble our budget for the rest of this fiscal year and next year.

The commerce department has been working on an incentive package to lure a company considering a large ($4 billion) manufacturing project in the state of Kansas. The name of the company is not being shared at this point, and we are competing with at least one other state. The project would also bring 4000 jobs. The bill is supported by the governor and passed in the senate with 32 voting yes and 7 no.

House Commerce committee and leadership have taken up the issue. The bill as it passed the Senate gave more in incentives than I could support.

The House changes currently proposed would reduce several of the provisions: the investment tax credit would be paid out over 10 years rather than just three, the payroll credit would be reduced from 10 percent to 7.5 percent, and the proposed 50 percent permanent reduction in property taxes is removed.

Another portion of the bill eliminated the corporate income tax rate over the next few years. The current House proposal could reduce it by 1 percent over two years. Currently, our top corporate income rate is 7.0 percent compared to 5.7 percent for individuals.

In past years, I have asked the Tax Foundation for their recommendations on changes to our tax policy. They have suggested that we reduce the corporate rate to be more in line with our individual rate as one of the most important to consider. I agree with their recommendation and support this change which would make the top rate 6 percent.

Initially, I believed the ongoing cost of this package exceeded the value relative to existing taxpayers. With these changes, I believe we have a win-win for the new business and existing Kansans. I will be listening to the governor’s office to assess if we need further adjustments to attract this business.

The insurance committee has heard two proposals to consider different investment restrictions for insurance companies within their general funds.

One considers the interest rate risk in the current environment and would provide flexibility to invest up to 5 percent more in preferred stocks. This could be used if companies calculate that to be a better way for them to manage risk.

The other change would only apply to a specific company that can hold private equity types of holdings.

This bill would allow an insurance company to hold in-kind (or similar types of ) investments to better insure the return and risk of those assets.

We plan to take action on these bills in committee in the next few days.

Have a great week!