Posted on Sat, May. 09, 2009

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Final tax bill expected to net state $61 million

BY JEANNINE KORANDA

Eagle Topeka bureau

TOPEKA - The House narrowly approved a tax bill Friday night that nets the state $61 million through a variety of means.

The Senate substitute for House Bill 2365 passed 65-56 with little debate. A bill needs 63 votes to pass the House. The measure now goes to Gov. Mark Parkinson for his signature.

The package is the final piece of the budget solution lawmakers cobbled together to close a $328 million budget gap. Both the tax bill and the budget bill, which included a 2.75 percent cut to most government agencies, came from the Senate and passed through the House with no changes.

Rep. Jeff King, R-Independence, who sat on the committee that negotiated the package with the Senate, called the measure "the last ship sailing."

Conservatives in both chambers criticized the bill as "tax increases" because businesses and other groups would pay more to the government than they anticipated.

Critics also argued the package did not leave enough of a cushion in the budget to protect against further revenue downfalls.

"We're upside down, folks," said Rep. Brenda Landwehr, R-Wichita.

The tax package would:

• Waive penalties to get delinquent taxpayers to pay about $35 million in back taxes.

• Shorten the time people can file for sales tax and use tax refunds from three years to one year, to bring in about $13.7 million in fiscal 2010.

• Suspend a tax credit for film production companies working in Kansas for two years, netting $1 million each year.

• Decrease other tax credits 10 percent for two years to save $9.2 million in the next fiscal year.

The package did not include delayed decreases in several taxes that Gov. Kathleen Sebelius had recommended in her initial budget proposal in January.

Those recommendations included suspending decreases in the estate and franchise taxes and decoupling the state tax code from the federal government's.

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