Brownback won't act to repeal sales tax hike

11/12/2010 12:00 AM

11/12/2010 7:12 AM

TOPEKA — Gov.-elect Sam Brownback said Thursday that he opposes a quick repeal of this year's Kansas sales tax increase, an idea circulating among Republican legislators.

The incoming GOP governor left room to back the idea in the future. Brownback already has said he wants to revise the state's tax system to promote economic growth.

But Brownback said the Legislature shouldn't repeal the sales tax increase next year because of its budget problems. He takes office and the Legislature convenes its annual session Jan. 10.

"We're short of resources for the state, and I don't think it's something that we should be doing at this time," Brownback told reporters after a Veterans Day ceremony in Topeka. "Our fiscal situation is not stable."

Rep. Owen Donohoe, R-Shawnee, suggested in a recent letter to colleagues that GOP House members make the repeal a top priority. He acknowledged in an interview that he hadn't spoken with Brownback about it.

In his letter, Donohoe called on colleagues to commit to a conservative agenda, noting Republicans' big election gains. The GOP picked up 16 House seats, giving them 92 to Democrats' 33.

"With the sweeping mandate of the Kansas voters, we have a rare opportunity to effect substantial legislation that reflects fiscal and family values in the next session," he wrote.

House Speaker Mike O'Neal, who, like Donohoe, opposed the tax increase, said it's fair to debate repealing it.

However, the Hutchinson Republican also said legislators may want to take a longer-term look at tax policy and consider reducing individual and corporate income taxes to spur growth. Brownback said last week that he'd like to cut individual income taxes.

"I think that all comes into the debate that we certainly will have," O'Neal said.

The sales tax rose from 5.3 percent to 6.3 percent in July. Outgoing Gov. Mark Parkinson, a Democrat, had pushed for the increase, saying it was needed to avoid crippling cuts in education funding and social services.

The tax increase is expected to provide $314 million for state programs during the current fiscal year and more than $370 million during the fiscal year that begins in July.

For the first three years, a small portion of the revenue will help support a 10-year, $8.2 billion transportation program that legislators approved this year, also at Parkinson's urging.

The sales tax is due to drop to 5.7 percent in July 2013, with all funds raised by the last 0.4 percent going to transportation. O'Neal acknowledged that repealing the increase next year could "hamstring" the program.

"There's a lot of moving parts here," he said.

Parkinson and other supporters of the sales tax increase argue that it stabilized the state's finances. But the state also used federal stimulus funds to bolster aid to public schools and spending on social programs.

Kansas officials expect no additional stimulus funds, leaving a $492 million gap in the next fiscal year's budget.

"We've got to balance our budget," Brownback said, adding that his goal is to phase out accounting moves the state has used in previous years to help paper over some problems.

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