- Associated Press - Monday, February 13, 2017

TOPEKA, Kan. (AP) - Kansas legislators are pushing a new plan to balance the state’s budget without touching aid to public schools, after top Republicans saw support for education funding cuts crash.

The House Appropriations Committee endorsed a bill Monday that would liquidate a state investment portfolio and loan most of the proceeds from selling its assets to the state’s main account to cover operating expenses through June 30. It’s a modified version of a proposal from Republican Gov. Sam Brownback and could be debated by the full House later this week.

The measure had strong bipartisan support even though committee members said they didn’t like using such borrowing to push budget problems into the future. They said it is better than cutting aid to the state’s 286 local school districts with four months left in the school year.

Brownback and legislators must close a projected shortfall of about $320 million by June 30, and Kansas faces total gaps in funding in existing programs of nearly $1.1 billion through June 2019. The Republican-controlled Legislature is rethinking past income tax cuts championed by Brownback, but lawmakers don’t believe they can raise any new revenues before July.

Senate Republican leaders last week outlined a budget-balancing package that would have immediately cut aid to public schools by $128 million, or $279 per student. But they canceled a Senate debate on it when it became clear that it couldn’t pass.

Kansas has struggled to balance its budget since Republican legislators slashed personal income taxes in 2012 and 2013 at Brownback’s urging. Even some GOP voters have concluded that the attempted economic stimulus was largely a bust.

The House Taxation Committee last week endorsed a bill that would increase personal income taxes to raise more than $1 billion over two years, starting in July. It would abandon core Brownback tax policies by raising rates, returning to three tax brackets, from two, and eliminating an exemption for more than 330,000 farmers and business owners.

The House could debate the tax measure this week. Republicans are split over it, partly because it would move the top income tax rate to 5.45 percent from the current 4.6 percent.

Passing it also would move the Legislature toward a confrontation with Brownback.

The governor has said keeping rates down and preserving the exemption for farmers and business owners are pro-growth policies. He has proposed boosting cigarette and liquor taxes and the annual filing fees paid by businesses.

“It’s also about finding something that the governor will sign,” said House Speaker Ron Ryckman Jr., an Olathe Republican, adding that getting veto-proof, two-thirds majorities for higher taxes will be “almost impossible.”

The bill approved Monday by the House Appropriations Committee would raise more than $360 million from liquidating the targeted investment portfolio. The state would claim $45 million in investment earnings and then loan $317 million to the state’s main bank account immediately.

The loan would be paid off over six years, but the first payment of $53 million wouldn’t come due until July 2018.

“If I look at the alternative, that seems much worse to me,” said Rep. Kathy Wolfe Moore of Kansas City, the panel’s top Democrat. “The only alternative that I can see at this point is cutting K-12.”


Editor’s Note: This story has been corrected to show that the Democratic representative’s name is Kathy Wolfe Moore, not Kay Woofe Moore.


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

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