GUEST COLUMN, Vance Ginn, Kansas Policy Institute
Kansas recently reported better-than-expected tax receipts—$248 million above projections—for the fiscal year ending June 30, 2025. Yet despite this encouraging news, Kansans won’t be seeing tax cuts anytime soon. Why? Because government spending continues to outpace sustainable levels, and the state’s new automatic tax reduction law has built-in roadblocks that delay relief even when taxpayers overpay.
According to the Sunflower State Journal, the combined total of individual, corporate, and financial institution taxes collected was about $6.038 billion for fiscal year 2025. That’s close—but still $87 million short—of the $6.125 billion threshold required to trigger automatic rate reductions under the 2024 tax law.
The law, passed over the objections of Governor Laura Kelly, gradually lowers individual income tax rates to a flat 4 percent if revenue exceeds fiscal year 2024 levels, adjusted for inflation. Corporate income taxes, currently set at a 3.5 percent base rate plus a 3 percent surcharge on income exceeding $50,000, would eventually be consolidated to 4 percent. Financial institutions would see their combined normal and surtax rates drop to 2.6 percent.
But that’s all conditional. The law only triggers reductions when the state’s rainy-day fund remains above 15 percent of general fund tax receipts (currently at over $1.8 billion) and revenue exceeds inflation-adjusted benchmarks. While the revenue side looks promising, Kansas still hasn’t crossed the finish line.
A Pessimistic Outlook Without Reform
Optimists note that if recent trends hold, revenue for FY 2026 could exceed the next threshold of $6.3 billion, triggering cuts. But the broader fiscal picture suggests deeper problems. According to KPI’s Responsible Kansas Budget, the state budget is a whopping $8.5 billion higher than it would be if spending had grown at the responsible rate of population growth plus inflation since 2005.
This kind of growth isn’t just unsustainable—it’s destructive. Kansas now ranks 23rd in state government spending per resident at $5,428, and 24th in state and local tax collections at $6,326 per capita. States like Florida and Texas—with no income tax—manage far better by keeping spending restrained and relying more on consumption-based tax models.
As a result of its high tax and spending burden, Kansas has seen net outmigration of 198,000 people since 2000. Those are families, entrepreneurs, and workers voting with their feet.
And while some point to higher revenues as validation of the tax law passed in 2024, the deeper truth is far less comforting. As Gov. Kelly warned, “Even with current revenues exceeding the forecast, the budget created by the state legislature still has us spending $300 to $700 million more than we receive each year for the foreseeable future.” By FY 2029, Kansas is projected to run a $375 million deficit.
Washington’s echo: The OBBB and the illusion of tax relief
This Kansas experience parallels what is happening in Washington with the so-called “One Big, Beautiful Bill” (OBBB)—a sprawling piece of federal legislation that claims to cut taxes but does so by raising spending and the debt ceiling. Like Kansas, federal lawmakers are trying to have it both ways: tax relief without real spending reform. This last point is the one lesson–that no one wants to learn–from the Brownback “experiment.”
OBBB contains some positive elements, such as making the 2017 Tax Cuts and Jobs Act provisions permanent and reducing certain green energy subsidies. But these are paired with costly new tax carveouts and an additional $4 trillion increase to the federal debt ceiling. The result? More fiscal uncertainty.
Kansas should learn from these missteps. Tax relief must be paired with immediate spending cuts, not delayed promises. Sustainable budgeting means living within the means of taxpayers, not spending windfalls and pretending fiscal cliffs don’t exist.
The real path forward: Cut now, cap later
Kansas needs to adopt responsible budgets, which begin not just by capping future growth but by cutting spending now. Simply waiting for revenues to increase to justify rate reductions isn’t enough, especially when spending continues to surge ahead of population and inflation.
The state must also reject the fallacy of burden shifting—lowering one tax while raising another. That’s not reform; it’s political sleight of hand. The goal should be a flatter, broader, and simpler consumption-based tax system that lowers the total burden and encourages growth.
A call for courage
Kansas isn’t just competing with its past—it’s in a race with states across the country. More than a dozen states have embraced flat taxes, and others are actively pursuing no-income-tax systems. Kansas shouldn’t follow. It should lead.
But that requires leadership willing to say no to pet projects, eliminate redundant agencies, and unwind decades of budget bloat. It also requires courage to resist fearmongering about “four-day school weeks” and “crumbling roads,” which are often used to justify further government expansion, even when surpluses abound.
If Kansas doesn’t change course, taxpayers will continue to pay more than necessary while receiving less in return. And as history has shown, there’s no long-term prosperity in that deal.
The time to act is now. Cut the spending. Cap the growth. And return Kansas to the path of real fiscal stability.
