TOPEKA — A penny doesn’t buy much these days. Let alone six-tenths of one.
But the $257 million that a six-tenths of a cent sales tax could generate next year is at the core of a prolonged political debate set to resume Wednesday when lawmakers return for a legislative wrap-up session.
The six-tenths of a cent sales tax, part of a temporary increase during the recession, is set to expire July 1. The state sales tax is scheduled to drop from 6.3 percent to 5.7 percent.
Republican Gov. Sam Brownback wants to retain the higher rate to help pay for the income tax cuts the Legislature approved and he signed into law last year.
A majority of the Senate seems to be with him on that. But the House, where Republicans have a 92-33 advantage, stands behind a plan to let the sales tax expire.
The most pronounced difference between the two chambers, beyond the political rhetoric, is that the House plan could put the state in a more precarious situation by eroding the state’s savings account within a few years, according to projections. The Senate’s plan keeps a comparatively stable ending balance on the books until 2018.
That could all be complicated next fall, when the state Supreme Court is expected to rule on a school finance case that has the potential to force lawmakers to spend more on public schools.
Politicians on all sides expect an intense debate.
“I hope that we can get some real movement going,” said Sen. Les Donovan, R-Wichita, who leads tax negotiations for the Senate. “It’s time to get serious and get this over with.”
Rep. Richard Carlson, R-St. Marys, who leads tax negotiations for the House, said he expects to find some kind of compromise, likely one involving the sales tax and a trigger for future income tax reduction.
The House proposal includes tax reductions whenever the state’s revenue grows by more than 2 percent, although it doesn’t provide any initial reduction. The Senate’s plan would slightly reduce rates over the next two years, then call for further cuts in years when revenue grows beyond 4 percent.
“We want to see an overall reduction in the tax burden for the people of Kansas,” Carlson said. He acknowledged that means cutting spending.
Brownback toured state universities during the Legislature’s monthlong break, urging extension of the sales tax as a way to prevent the 2 to 4 percent cuts to higher education proposed by the Senate and House.
Democrats say it’s a false choice driven by last year’s approval of an income tax cut.
“You sort of now have the guy who started the fire has finally decided to call the fire department,” said House Minority Leader Paul Davis, D-Lawrence. “We wouldn’t be in this situation if it wasn’t for the income tax cuts that were far above what the state could afford.”
He and Senate Minority Leader Anthony Hensley, D-Topeka, say they don’t believe any Democrats will vote in favor of extending the sales tax, even if it means Republican majorities will cut higher-education budgets.
But Republicans hold sway in the Statehouse, and the tax debate is directly tied to House and Senate budget proposals.
Also tied up in the budget are potential cuts to a wide variety of state agencies; a decision on whether to keep Kansans with developmental disabilities outside the new, privately managed Medicaid system called KanCare; a proposed $2 million cut from the National Center for Aviation Training in Wichita; and cuts to higher education, which could be replaced by cuts to transportation plans.
House leaders say they don’t plan to deal with any bills that haven’t already been approved by one of the two chambers. That could mean sidelining ideas such as allowing a higher alcohol content in beer and wine sold in grocery stores.
But that’s always subject to change.
Among other issues expected to emerge before the planned May 18 adjournment:
• A bill allowing schools to hold back first-graders with poor reading skills. The proposal stems from Brownback’s recommendation to hold back third-graders who can’t pass reading tests, but that plan met resistance and was reduced to one allowing first-grade retention that could be overruled by parents.
• A proposal to put a constitutional amendment on next fall’s ballot that could allow the governor to appoint Supreme Court judges, subject to Senate approval
• A bill or budget proposal to provide $202 million in bonds to help pay for the National Bio and Agro-Defense Facility in Manhattan.