Archive for Monday, June 8, 2015

Kansas House faces vote on raising taxes to balance budget

June 8, 2015

— Kansas House members could balance the next state budget by approving a plan to boost sales and cigarette taxes after the Republican supermajority in the Senate overcame deep divisions to pass the measure.

The House faced a potential vote on the tax plan Monday, the 109th day of a legislative session that is now the longest in state history. The Senate's vote Sunday night was 21-17 to approve the measure.

Passage by the House would send the measure to GOP Gov. Sam Brownback. Rejection would force legislative negotiators to draft a new plan for raising revenues to prevent a deficit arising from the $15.4 billion budget lawmakers have approved for the fiscal year beginning July 1.

The state's budget problems began after lawmakers slashed personal income taxes in 2012 and 2013 at Republican Gov. Sam Brownback's urging as an economic stimulus. The tax bill approved by the Senate would raise $423 million during the next fiscal year — more than enough to balance the budget — by increasing the state's sales tax to 6.55 percent from 6.15 percent and raising the cigarette tax by 50 cents a pack to $1.29.

Republican leaders pushed the tax plan to Senate passage after negotiators for the two chambers added several sweeteners to proposals that senators had overwhelmingly rejected only the day before.

"I think overall, it's a pretty good sandwich," said Republican Sen. Steve Fitzgerald, of Leavenworth. "I think we ought to get through this and get it down."

The Senate also approved the bill containing most of the budget for the next fiscal year on a 23-11 vote. The House passed it last week, and it goes next to Brownback.

Republicans' inability to resolve budget and tax issues had threatened to force the state to furlough thousands of workers next week. But lawmakers passed a bill to avert a partial government shutdown, Brownback signed it and the new law took effect Saturday night.

With furloughs averted and a state budget completed, the House's vote on the tax plan would determine whether lawmakers would wrap up business Monday. But Republican Rep. Marvin Kleeb, of Overland Park, the House's top tax policy negotiator, was skeptical of the bill's chances in his chamber.

Besides increasing sales and cigarette taxes, the measure would raise $24 million during the next fiscal year by increasing taxes for business owners. More than 330,000 business owners and farmers don't have to pay income taxes on their profits under a 2012 policy Brownback championed.

The governor has threatened to veto any plan that increases taxes for business owners by more than $24 million during the next fiscal year. But some House Republicans have pursued plans with lesser sales tax increases and greater tax increase for business owners, in defiance of Brownback's veto threat.

In the Senate, Democrats argued that under the latest tax plan, poor and middle-class families were being asked to pay for income tax cuts for the wealthy through consumption tax increases. Some GOP conservatives didn't think lawmakers were doing enough to curb spending.

"You can resist and work for better government and limited government," said Sen. Dennis Pyle, a conservative Hiawatha Republican.

Each extra day of the Legislature's annual session has cost the state more than $40,000. Lawmakers traditionally schedule their sessions to last 90 days, and the previous record of 107 days was set in 2002 — another year lawmakers increased taxes to close a budget gap.

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