Archive for Sunday, May 17, 2015

Kansas legislators struggle to draft tax plan for budget fix

May 17, 2015

— Kansas legislators reached what had been set as the last working day of their annual session without passing a plan to raise taxes and close the budget shortfall.

The Republican-controlled Legislature's debate over raising new revenues centers on two key issues. One is how much to increase the state's 6.15 percent sales tax. The other is whether the state should retain an income tax break enacted in 2012 for more than 330,000 farmers and business owners — a policy championed by GOP Gov. Sam Brownback as an economic stimulus.

Republican legislators acknowledge they're deeply split over both issues and reluctant to embrace any tax increases because their conservative-led state party celebrates low taxes and smaller state government.

"We have to govern," said House Taxation Committee Chairman Marvin Kleeb, an Overland Park Republican. "There are essential state services and education that we have to provide the funds for."

Legislative leaders traditionally schedule 90 days for lawmakers' annual session, and Saturday was the 90th this year. But legislators plan to return Monday to the Statehouse for a 92nd day.

It's possible that this year's session could become the sixth in state history to last 100 days or more — at a total of $43,000 for each extra day.

"We have absolutely no idea how to get out of this session," said Democratic Rep. Jim Ward, of Wichita.

Legislative researchers project a $406 million budget shortfall for the fiscal year beginning July 1.

The state's budget problems arose after the Legislature slashed personal income taxes in 2012 and 2013 at Brownback's urging. Many GOP legislators said they remain committed to phasing out all income taxes and, like Brownback, they see shifting the burden of financing government to consumption-based taxes as an acceptable fix.

Brownback has touted the 2012 policy that exempted the profits of 281,000 business owners and 53,000 farmers from income taxes. Business groups are fighting to retain it, but some Republicans, including Senate President Susan Wagle, have argued that it needs to be rethought.

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