Archive for Thursday, June 11, 2015

Kansas House soundly rejects plan to avert steep budget cuts

June 11, 2015, 11:11 a.m.

Updated: June 11, 2015, 12:45 p.m.

— Kansas faced the prospect of deep cuts to schools, prisons and other programs Thursday after the Republican-controlled House soundly rejected a proposal supported by Gov. Sam Brownback that would hike sales and cigarette taxes to close a budget deficit.

In past years, legislators backed the GOP governor by slashing personal income taxes in an effort to stimulate the economy, but those policies contributed to a deficit that ballooned this year.

With a constitutional mandate against operating in the red, Brownback's preferred solution got little support this time, even from his own party. The House voted 94-21 against a plan that would generate more than $400 million in revenue over the fiscal year beginning July 1, largely by increasing the state's sales tax from 6.15 percent to 6.55 percent and imposing a 50 cents-per-pack hike on cigarettes.

Brownback's budget director has warned lawmakers that, if the governor is forced to cut the deficit on his own, it will come with a steep price to programs — including the loss of $197 million in state aid to schools. Brownback spokeswoman Sara Belfry said his office would comment on the House vote later.

Republican lawmakers are deeply divided over raising taxes, particularly for more than 330,000 business owners and farmers who no longer pay income taxes on their profits under a 2012 policy Brownback championed. The bill was in line with Brownback's thinking of allowing only a modest increase.

Nearly three-quarters of the chamber's Republican supermajority voted no, though some were conservatives who want lawmakers to cut spending.

The state's budget shortfall arose after lawmakers slashed personal income taxes in 2012 and 2013 at Brownback's urging.

House Speaker Ray Merrick, a Stilwell Republican, had promised GOP lawmakers before the vote that the bill was "the last train out of here," suggesting its failure would cause the Legislature to adjourn its session without passing a tax bill. That would leave Brownback to cut spending himself or call lawmakers back into a special session.

But on Thursday, groups of GOP House members planned to meet in private to see if they would draft a new proposal, and House and Senate tax negotiators expected to have public talks in the evening. Asked whether there could be another tax plan, Merrick said, "could be."

"The train is still on the track," he said.

Senate Majority Leader Terry Bruce, a Nickerson Republican, was more pessimistic. He said lawmakers probably wouldn't adjourn for good Thursday, but GOP senators are willing to end the session if they feel they have "exhausted all possible remedies."

"We do have an adjournment resolution," he said. "That's really the only thing we can do of any substance on our side."

The House vote was extraordinary because GOP leaders held the roll open for more than four hours over two days in hopes of getting members to switch from voting no to yes. That's allowed under a procedure for forcing absent members to return to the chamber to vote, and 10 lawmakers were absent.

The vote began Wednesday night and was interrupted because of House rule requiring business to stop at midnight. Members picked up at the same point Thursday morning.

Thursday was the 112th day of the Legislature's annual session, making it the longest in state history. Sessions are traditionally scheduled for 90 days.

On taxes for business owners and farmers, Brownback has said he'll veto any plan with an increase for them of no more than $24 million during the next fiscal year. The bill rejected by the House contained that increase.

But some House Republicans had wanted to defy his veto threat and raise as much as $101 million.

Democrats oppose increasing the sales tax, arguing that it will hurt poor and middle-class families by forcing them to pay for past income tax cuts for the wealthy.

They also argued the policy exempting business owners' and farmers' profits from income taxes should be reversed. Some Republicans agreed that it's unfair to allow business owners to avoid income taxes when their employees' wages remain taxed.

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