Each year in preparation for the upcoming legislative session, my office evaluates our current programs to determine whether or not improvements can be made. After much hard work and consideration, I am pleased to present a package of bills to the 2007 Kansas Legislature which provides for good public policy and should benefit Kansans. I am seeking improvements to the Unclaimed Property and Learning Quest programs, plus I will be introducing a bill that will offer a tax incentive to those Kansans who will make saving money a priority.
In the savings bill, I propose that the first $100 of interest income, or $200 for joint-filers, be exempt from state taxation. I have traveled the state in recent years promoting financial literacy and have learned Kansans feel unprepared for their future financial obligations. In fact, research shows that Americans presently have a negative savings rate, meaning we are spending more than we are making. I hope this proposed change will be an incentive for more Kansans to save money for these future obligations.
Other bills that will be introduced are:
Unclaimed Property Legislation:
Returning Interest on interest-bearing accounts:
A bill has been introduced that, if passed, will pay interest on interest-bearing unclaimed property accounts. The legislation would amend the Unclaimed Property Act to allow the State Treasurer's office to pay interest on property claimed that was originally reported to the office as an interest-bearing account. Currently, the interest earned on these types of accounts is retained by the state and incorporated into the State General Fund.
The legislation will affect only demand accounts that earn interest, savings accounts and certificates of deposit.
This is the type of legislation that I enjoy presenting because it is the right thing to do - paying Kansans the money they are owed.
Unclaimed property includes inactive savings and checking accounts, uncashed checks, stock shares and bonds, dividend checks, insurance proceeds, mineral royalties, utility deposits, and safe deposit box contents. The Kansas State Treasurer's office receives property from businesses and state and local governments and actively searches for Kansans to reconnect them with their lost or forgotten property and cash.
During the last fiscal year, a record amount of unclaimed property - more than $11 million - was returned to Kansans by the Kansas State Treasurer's office. The average annual amount returned is $8 million. Searching for and claiming unclaimed property is easy. Visit www.KansasCash.com or call 1-800-432-0386.
529 Education Savings Program Legislation:
Increase Tax Deductible amount available to 529 investors:
Encouraging more Kansans to invest in a 529 plan for their loved one's post-secondary education is one of my top priorities. We are always looking for ways to offer more incentives to save. As a result I have proposed legislation that will double the amount families can deduct from their taxes. The increased deductions are more in-line with the majority of other states that offer 529 tax deductions.
Current law allows Kansas taxpayers to receive a state adjusted gross income deduction of up to $3,000 ($6,000 if married filing jointly) per beneficiary for contributions made to their 529 education savings account. If passed, the legislation will raise these deductible amounts to $6,000 and $12,000 deductions respectively.
Changing Date of Contribution Deadline:
Reacting to requests from Kansans, my office will propose changing the contribution deadline for making contributions to a 529 plan from December 31 to April 15. Time and time again I have been told that the end of the calendar year is a difficult financial time for most Kansas families. There are just too many things to pay for in December and families have to make choices.
My hope is that by moving the deadline to April 15 of the following year the burden will be lessened and more Kansas families will be able to open and contribute to their 529 plans. Another benefit of moving the deadline is that the timeline will be more in line with the deadline IRA investors are accustomed to.
Learning Quest, the Kansas 529 Education Savings Program, has over 99,000 accounts worth over $1.6 billion. In addition to the state tax deduction, Kansans can receive federal and state tax benefits of tax-deferred growth and tax-free withdrawals for qualified educational expenses. The availability of tax or other benefits may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors.
I believe my office is offering a number of prudent and beneficial bills to the 2007 Kansas Legislature. I hope you agree and are moved to contact your state legislator to inform them of your support of our bills. Log onto my office's website, www.KansasStateTreasurer.com, and click on the link to the Kansas Legislature to find contact information for your area lawmakers. If you have questions about bills we are presenting or would like to find out more about the State Treasurer's office you will find links to our numerous programs on the site.
Thank you for the opportunity to serve as your State Treasurer. It is my greatest honor.
