- Associated Press - Tuesday, May 19, 2015

TOPEKA, Kan. (AP) - A budget-balancing plan to raise Kansas’ sales tax and repeal an income tax break championed by Republican Gov. Sam Brownback cleared a state Senate committee Tuesday, but GOP legislators are split and influential business groups oppose it.

The Assessment and Taxation Committee’s plan would raise $496 million during the fiscal year that begins July 1 to close a projected budget shortfall and leave the state with a small financial cushion. The measure also would increase tobacco and gasoline taxes.

The Republican-dominated committee voted 6-4 to forward a bill containing the plan to the Senate for debate without endorsing its contents - showing that members feel some pressure to demonstrate that lawmakers are making progress toward balancing the budget. The Senate could debate the plan as early as Thursday.

The key issues for Republicans are how much to increase the state’s 6.15 percent sales tax and whether to backtrack on a 2012 policy exempting the profits of 281,000 business owners and 53,000 farmers from income taxes. Brownback pushed for the exemption, and he and business groups see it as an economic stimulus, but retaining it would require a larger sales tax increase than some GOP lawmakers want.

“Compromise is not a bad word,” Chairman Les Donovan, a Wichita Republican, told the Senate committee near the start of its meeting. “Those folks that have these 100 percent opinions - that your idea, your way is the only way that matters - that is so counter-productive, so bad.”

The state’s projected budget shortfall of $406 million for the next fiscal year arose after legislators cut personal income taxes in 2012 and 2013 at Brownback’s urging.

Brownback met Tuesday morning with top Republican legislative leaders. The House Taxation Committee worked on a plan to increase sales, tobacco and gasoline taxes, while also reinstating taxes on business owners’ and farmers profits but didn’t finish with its debate.

Tuesday was the 93rd day of the Legislature’s annual session, three more than its leaders traditionally schedule.

The Senate committee’s proposal would repeal the exemption for business owners and farmers and replace it with a less lucrative tax credit against their payrolls. It also would freeze existing income tax rates, jettisoning reductions promised for the future.

“There’s nothing about that bill that we would like,” said Eric Stafford, a lobbyist for the Kansas Chamber of Commerce, which is lobbying with the National Federation of Independent Business to retain the exemption for business owners and farmers.

The sales tax would rise to 6.5 percent, though the rate on food would drop to 6 percent. The cigarette tax would increase by 50 cents a pack, to $1.29, and the gasoline tax would rise by 5 cents a gallon, to 29 cents.

Republican Sen. Mary Pilcher-Cook, of Shawnee, a committee member who opposes the bill, said the state shouldn’t raise taxes at all.

“We need to cut more spending, as difficult as that may be,” she said.

But the Republican chairmen of the House and Senate budget committees said they expect only minor adjustments in recommendations that so far would allow spending to grow about 3 percent.

Democrats argue that increasing sales, tobacco and gasoline taxes hurts poor and working-class families more than wealthier ones. Democrats have shown no inclination so far to help Republicans pass a budget-balancing plan, having opposed the 2012 and 2013 income tax cuts and having argued that they would wreck the state’s finances.

“Until they can own up and take the responsibility for that, we’re going to continue to see these unfair kind of solutions,” said Senate Minority Leader Anthony Hensley, a Topeka Democrat.

___

Online:

Kansas Legislature: https://www.kslegislature.org

___

Follow John Hanna on Twitter at https://twitter.com/apjdhanna

LOAD COMMENTS ()

 

Click to Read More

Click to Hide