Will Laura Kelly veto the bipartisan Kansas tax cut plan? Here's her first public comment.

Democratic Gov. Laura Kelly has yet to officially decide what she will do with the bipartisan tax cut plan passed by the Legislature earlier this month.

The Legislature formally sent House Bill 2036 to Kelly's desk on Monday, meaning Kelly has until April 25 to decide whether to sign, veto or let the package of income, property and sales tax cuts become law without her signature.

"All Kansans are now just one signature away from relief from the burden of high property, income, Social Security, and food sales tax," House Speaker Dan Hawkins, R-Wichita, and Senate President Ty Masterson, R-Andover, said in a Monday statement. "Kansas has a burgeoning budget surplus and it's time to deliver that money back to Kansas taxpayers where it belongs. We call on the governor to sign this tax relief bill right away."

In her first public comments on the tax cut plan since its passage, Kelly said Tuesday that she hadn't seen the bill yet. However, her initial reaction is that it's "too expensive."

"I really need to take a look at that and then have some serious conversations with my budget people, looking forward to see if my gut sense is that it is too expensive and not sustainable," she told reporters after a Medicaid expansion promotional event at the Shawnee County jail.

New tax revenue projections in Kansas are coming soon

Kelly's budget staff will soon have new projections of tax revenue, once the Consensus Revenue Estimating Group meets.

"That's helpful, obviously, to see what the projections are," Kelly said. "We had been riding high. We were beating the estimates all the time. But in the last seven or eight months, we've seen a bit of a downturn.

"Based on the estimates, we're still in pretty good shape. But we need to see if that's a trend, that estimates are going to be lower, which would feed into that sense that that package is too expensive and not sustainable over the long haul."

She also urged people not to simply look at the ending balance and rainy day fund. As of the November consensus revenue estimates, the state was projected to end fiscal year 2024 with a budget surplus of $2.8 billion in ending balance plus $1.7 billion in the rainy day fund.

While Kelly said it's true that the state has a lot of money, she cautioned against using it for recurring expenses or permanent tax cuts. She has instead proposed one-time expenses, like paying down debt.

"You can't use that money and give a tax cut," Kelly said. "You could do a tax rebate, which I suggested several times, but you can't do a structural change to the tax system using that money."

Kelly previously said her cap on long-term tax cuts is $425 million a year by fiscal year 2029. The plan passed by the Legislature is $469 million by that year, and it doesn't include another $18 million in a tax credit in a separate package she is supporting.

Kansas governor urged more income tax brackets

In addition to the fiscal cost of the tax cut plan, Kelly has expressed opposition to a structural change in the income tax system. Kansas currently has three income tax brackets, but the bill would reduce it to two brackets. Republicans had been pushing for a flat tax with a single rate, but GOP leadership moved on after they were unsuccessful at overriding Kelly's veto earlier this session.

Kelly told House Democrats earlier this month that maintaining three tiers "is incredibly important going forward. It is the fairest way to do it. If anything, I want more tiers."

More: Will Laura Kelly sign newest tax cut plan after Kansas lawmakers ignored her advice?

But House Democrats ignored the governor's ask to support a different tax cut plan, joining with Republicans to vote it down on the penultimate day of the regular legislative session. The new version of HB 2036 was crafted on the last day of regular session and passed unanimously in the House, but with Democrat opposition in the Senate.

"It's incredible to see how far we've come this session on tax relief and how working together in a bipartisan way with legislative Democrats produced a sustainable tax relief package that will benefit all Kansans," Hawkins said in a statement. "The overwhelming bipartisan support for this tax relief bill is a true testament to the efforts made to ensure its long-term financial stability.

"These are the very themes we've heard the governor repeat for almost six years now, so it would be strange for her to retreat from them. After all this hard work by legislators, both rural and urban, Republican and Democrat, we look forward to her signing the tax plan and joining us in providing bipartisan, sustainable tax relief to all Kansans."

Kansas Legislature would likely have votes to override possible veto

If Kelly vetoes the tax cut plan, it would add to a growing list of work for legislators to take up during veto session. The Legislature appears to have the votes to override a potential veto, and the vote would likely be bipartisan, at least in the House.

"I can't in good conscience advise my members to vote to sustain (the veto) unless first they can present a plan to me that's better than the one we passed and give me some assurance that the other side will approve that plan," said House Minority Leader Vic Miller, D-Topeka.

He told reporters after the governor's Medicaid expansion event that he is "very happy with the product that we ended up with" on tax cuts. He also said he does not share the governor's concern that it is too expensive.

"I'm a fiscal conservative, but I think the people looking for tax relief have waited long enough," Miller said. "We have, in my opinion, healthy balances both now and after we implement this plan. Good lord, there's $1.7 billion sitting in a rainy day fund."

Jason Alatidd is a Statehouse reporter for The Topeka Capital-Journal. He can be reached by email at jalatidd@gannett.com. Follow him on X @Jason_Alatidd.

This article originally appeared on Topeka Capital-Journal: Will Kansas Gov. Laura Kelly sign or veto bipartisan tax cut plan?